California Judge Breaks With New York Counterpart, Sends Ripple Securities Lawsuit to Trial

In her Thursday ruling, Hamilton said that Ripple’s lawyers urged her to “follow the reasoning” of U.S. District Court Judge Analisa Torres who, in a parallel case in the Southern District of New York (SDNY), ruled that XRP did not meet all the prongs of the Howey Test when sold directly to retail participants on crypto exchanges.

Torres’ ruling constituted a partial victory for Ripple, and was celebrated by many in the crypto industry as a step in the right direction for long-awaited regulatory clarity, as well as a potential precedent for other crypto securities cases. But Torres’ ruling hasn’t seemed to have as much sway as hopefuls once thought it might. Last year, Torres’ colleague in the SDNY, District Judge Jed Rakoff, rejected her ruling in a separate case brought by the U.S. Securities and Exchange Commission (SEC) against Singaporean crypto firm Terraform Labs.

Hamilton, in her Thursday ruling, also broke with Torres’ legal opinion that that XRP sold to “programmatic” (meaning non-institutional) traders was not a security because those traders had no expectation of profits due to the efforts of others, one of the four prongs of the Howey Test.

Source: California Judge Breaks With New York Counterpart, Sends Ripple Securities Lawsuit to Trial