Bankless How Ripple's Win Reshapes Crypto with Paul Grewal & Mike Selig
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Jul 14, 2023 Join Paul Grewal, Chief Legal Officer at Coinbase, and Mike Selig, Counsel at Wilkie Farr & Gallagher, as they delve into a landmark U.S. court ruling declaring XRP is not a security. They discuss the ruling's implications for other cryptocurrencies and celebrate a hopeful shift in regulatory oversight. The duo examines the SEC's diminishing influence, the potential for broad legal precedents affecting token holders, and the need for clearer regulations in the evolving crypto landscape.
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XRP Not a Security, Investment Contract Is
- XRP, the token itself, was never deemed a security by Judge Torres, only the initial investment contracts surrounding its sale.
- This distinction separates the asset from the transaction, challenging the SEC's broader interpretation.
Transactions, Not Assets, Determine Security Status
- Judge Torres focused on the transaction, not the underlying asset, when evaluating the SEC's claims. The Howey Test requires a transaction-by-transaction analysis.
Appealing the XRP Ruling
- Judge Torres's ruling on XRP is a final decision, subject to a high-bar appeal process to the Second Circuit Court of Appeals.
- The SEC can appeal after the trial on aiding and abetting concludes, a process that could take years.