Ripple Labs won a partial victory in court on Thursday as a federal judge ruled that some of its sales of the XRP token, which were challenged as securities violations by the Securities and Exchange Commission, did not fully meet the definition of a securities offering.
In a statement, an SEC spokesperson lauded parts of the judgment that found sales of XRP to be,"investment contracts in violation of the securities laws in certain circumstances," and noted that the court rejected Ripple's preferred definition of a security test for investment contracts.
"Therefore, the vast majority of individuals who purchased XRP from digital asset exchanges did not invest money in Ripple at all," Torres wrote. “The logical conclusion is that secondary sales of XRP are not securities transactions,” said Stephen Palley, partner and co-chair of the digital commerce group at the law firm Brown Rudnick.
“This is a major victory for the industry and a major loss for the SEC because in fact by holding that the programmatic sales are not investment contracts, she is holding that secondary market transactions in crypto assets are not securities,” said Gary DeWaal,Teresa Goody Guillén, a partner at law firm BakerHostetler, agreed.
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