u.today
In a recent legal development, Ripple scored a significant victory with the dismissal of most claims in a class action lawsuit regarding XRP. Judge's decision in the Court for the Northern District of California narrowed the case to a minor state law claim related to allegedly misleading statements.
The focal point of the ongoing debate is whether XRP should be classified as a security. While Californian ruling is a win for Ripple, it is suggested that XRP could potentially be considered a security under certain circumstances. This stance contrasts with Judge Torres' earlier ruling in New York that XRP does not qualify as a security when sold to institutional investors.
But didn't California just adopt Howey as its own analysis in determining whether a transaction is a security under its state law definition in Corp. Code section 25019?
— Fred Rispoli (@freddyriz) June 29, 2024
Legal experts Fred Rispoli and Marc Fagel have weighed in on the implications of these developments. Rispoli, a staunch supporter of XRP, highlighted the potential impact of California law on the definition of securities in light of the court's interpretation.
Meanwhile, Fagel, drawing on his SEC experience, noted the nuanced federal and state considerations in determining whether XRP transactions fall under securities regulation.
"The court's decision leaves open the possibility that XRP could be classified as a security under California law, if not federal law," Rispoli noted in response to the ruling.
Fagel disagreed, emphasizing that while California's adoption of federal standards such as the Howey test influences local interpretations, the broader implications for federal courts seeking guidance remain limited.