Three weeks ago, it seemed to crypto enthusiasts like the clouds were parting, if only just a bit. A July 13 decision by US District Judge Analisa Torres in a case brought by the SEC found that the token XRP was a security when initially sold to institutional investors by its creator Ripple Labs, but not when sold to retail on the secondary market. Crypto rejoiced, XRP rallied and shares of Coinbase — itself a target of the SEC — had their best day in over a year.
Then crypto learned the hard way that judges don’t always agree. In an SEC case on Monday against Terraform Labs and its co-founder Do Kwon (accused by the agency of defrauding investors who lost at least $40 billion when the project blew up), US District Judge Jed Rakoff explicitly rejected Torres’s reasoning for retail investors, saying it depends on how tokens are marketed. Cue ire and clenched fists, along with XRP and Coinbase giving up some gains.
‘Enforcement 40’ for 2020
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