Fred Rispoli’s concern about the legal status of XRP highlights potential regulatory inconsistencies, suggesting that it could be considered a security in California but not in New York.
Despite Judge Phyllis Hamilton dismissing several claims against Ripple in the Zakinov lawsuit, including allegations of securities law violations, the debate over whether XRP qualifies as a security remains unresolved.
Prominent legal expert Fred Rispoli has raised a significant concern about the legal status of XRP, suggesting that the coin could be classified as a security in California but not in New York.
Attorney Rispoli shared this perspective in response to the recent ruling in the Zakinov civil securities lawsuit against Ripple. The case accused Ripple CEO Brad Garlinghouse of violating securities laws through the 2017 XRP offering and received a summary judgment decision yesterday.
In the ruling, Judge Phyllis Hamilton dismissed four claims against Ripple, including the allegation of the company’s failure to register with the SEC, as reported by Crypto News Flash. However, she ruled that a jury would need to decide whether Ripple’s offering and sale of XRP constituted a security.
It is worth noting that Ripple’s legal team urged Judge Hamilton to adopt the rationale used by Judge Analisa Torres in the SEC lawsuit. Judge Torres ruled that Ripple’s programmatic sales of XRP on digital exchanges do not qualify as securities.
Judge Torres determined that programmatic buyers of XRP did not expect to profit directly from Ripple’s efforts, addressing one of the prongs of the Howey test, which is used to determine whether a transaction is a security.
However, Judge Hamilton did not adopt this reasoning, stating that the matter was a question of law for the jury to decide. This is not the first time a U.S. District Judge has disagreed with Judge Torres’ reasoning. Last year, the judge in the SEC v. Terra lawsuit also rejected the logic behind Judge Torres’ verdict.
Attorney Rispoli emphasized the need for federal legislation in light of the latest disagreement with Judge Torres’ logic. He noted that while XRP is considered a non-security in New York, it could be classified as a security in California.
Federal legislation is crucial to ensure clarity and consistency regarding the regulatory status of crypto assets, including XRP, across different jurisdictions.
Meanwhile, Ripple’s Chief Legal Officer Stuart Alderoty maintains that Judge Torres’ reasoning remains valid despite the recent ruling in the Zakinov case.
In terms of XRP’s price action, despite these positive developments, the cryptocurrency continues to trade below the important resistance level of $0.50. Currently, the XRP price is down 1.82%, trading at $0.4857, with a market cap of $27 billion.