On July 13, 2023, Judge Analisa Torres issued a summary judgment decision in SEC v. Ripple Labs, Inc., No. 20 Civ. 10832, ECF No. 874 (S.D.N.Y. July 13, 2023), holding in part that Ripple’s sales of XRP through trading platforms did not constitute securities transactions while its direct sales to institutional investors did. In contrast, on July 31, 2023, Judge Jed Rakoff rejected Judge Torres’ distinction based on how the digital assets were sold in SEC v. Terraform Labs Pte. Ltd., No. 23 Civ. 01346, ECF No. 51 (S.D.N.Y. July 31, 2023), denying defendants’ motion to dismiss the Securities and Exchange Commission’s claims that they violated federal securities laws in part by selling various digital assets through trading platforms.
Although Judge Torres and Judge Rakoff disagreed on whether sales through trading platforms may constitute securities transactions, the facts and procedural postures of the two cases differ in meaningful ways that may explain the outcomes and shed light on how future courts may view this legal issue.
Source: Two sides of the same coin: analyzing the recent Ripple and Terraform decisions | Reuters
