XRP Likely to be Classified as a Security in California

XRP — the polarizing token associated with Ripple—is likely to be classified as a security in California, says Fred Rispoli, a lawyer.

On Thursday, it cleared the way for a civil securities case against the San Francisco-based company to proceed. U. The Honorable S. District Court Judge Phyllis Hamilton, hearing this case, dismissed the defendants’ attempts to argue that pump-and-dump scheme; all jurors would need to decide was whether the token was a security when it came to retail buyers on an exchange.

This ruling is particularly embarrassing for Ripple given that it is yet another contrary decision by any other judge other than Judge Analisa Torres. This is one of the reasons why Judge Torres ruled that secondary sales of XRP were not securities for the SEC to regulate. Still, her ruling did not much succeed in gaining the support. District Judge Jed Rakoff did not distinguish between programmatic and institutional sales of tokens, and a recent Coinbase decision was mainly relying on Rakof/System Requirements for Sales of Tokenized Assets 317 the decision of Rakoff.

It is a bit of outside thinking that perhaps the SEC may not appeal the case so as to avoid promoting the unpopular Torres legislation. It is logical to assume that XRP may fall under the classification of a security in the state of California even though it does not qualify for such in New York.

According to Rispoli, such reversals warrant continued pressure on attaining federal legislation within the cryptocurrency industry.

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