Ripple Chief Legal Officer Stuart Alderoty declared 'Happy XRP IS NOT A SECURITY Day,' marking the 3rd anniversary of U.S. District Judge Analisa Torres' July 13, 2023 ruling in the SEC's lawsuit against Ripple. The court ruled that Ripple's programmatic XRP sales on public exchanges were not securities transactions because buyers had no direct relationship with Ripple and could not reasonably expect profits solely from the company's efforts. Although the court found Ripple's institutional XRP sales violated securities laws, Judge Torres made clear that XRP itself is not inherently a security. The ruling reshaped the regulatory landscape for digital assets in the United States and became a landmark precedent that weakened the SEC's broader legal strategy.
Judge Torres Ruled Programmatic XRP Sales Not Securities Transactions
Judge Analisa Torres ruled that Ripple's programmatic XRP sales on public exchanges were not securities transactions because buyers had no direct relationship with Ripple and could not reasonably expect profits solely from the company's efforts. The court rejected the SEC's claim that XRP itself was a security, drawing a critical distinction between the digital asset and the specific transactions in which it was sold. Although the court found Ripple's institutional XRP sales violated securities laws, it made clear that XRP itself is not inherently a security. The ruling quickly became a landmark precedent for the crypto industry, weakening the SEC's broader legal strategy and influencing subsequent digital asset cases.
John Deaton Acknowledged 75,000+ XRP Holders Shaped Ruling
Crypto attorney John Deaton acknowledged that the steadfast backing of more than 75,000 XRP holders was instrumental in helping Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen withstand years of SEC pressure during the regulator's lawsuit against the company. Judge Torres cited Deaton's amicus brief and nearly 4,000 affidavits from XRP holders, one of the few exhibits specifically referenced in the court's summary judgment. Deaton pointed out that the judge referenced an argument he made during the LBRY case concerning secondary-market sales of digital assets. In his Ripple brief, Deaton urged the court to explicitly recognize that XRP itself is not a security, arguing that digital tokens are simply software code and should not automatically assume the legal status of the transactions in which they are sold.
FAQ
What did Judge Analisa Torres rule on July 13, 2023 regarding XRP?
Judge Analisa Torres ruled that Ripple's programmatic XRP sales on public exchanges were not securities transactions because buyers had no direct relationship with Ripple and could not reasonably expect profits solely from the company's efforts. Although the court found Ripple's institutional XRP sales violated securities laws, it made clear that XRP itself is not inherently a security.
How did XRP holders contribute to the Ripple ruling?
Crypto attorney John Deaton acknowledged that more than 75,000 XRP holders provided steadfast backing that helped Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen withstand years of SEC pressure. Judge Torres cited Deaton's amicus brief and nearly 4,000 affidavits from XRP holders in the court's summary judgment, one of the few exhibits specifically referenced in the ruling.
