After the highly anticipated summary ruling in the Ripple Vs. SEC case, Ripple emerged victorious as Judge Analisa Torres ruled that XRP should not be classified as a security. However, there have been extensive deliberations on the specific details and nuances of the ruling, with everyone having different perspectives.
To shed light on the matter, Paul Grewal, the Chief Legal Officer at Coinbase, has provided clarifications regarding the status of XRP and its compliance with Howey’s Test, which is a crucial criterion used to determine the classification of assets.
Paul Grewal Clarifies XRP’s Security Status
Paul Grewal took to Twitter to clarify any potential misunderstandings about Judge Torres’ ruling on XRP’s security status. He emphasized that the ruling did not suggest that XRP is intermittently classified as a security. On the contrary, the ruling explicitly states that XRP is never considered a security.
Grewal referred to page 15 of the ruling, highlighting that XRP, as a digital token, does not inherently embody the characteristics of a “contract, transaction, or scheme” that fulfill the requirements outlined in the Howey test for an investment contract.
Coinbase Relists XRP After Delisting in Jan 2023
Coinbase exchange made the decision to remove Ripple’s XRP from its trading platform in January 2023, citing low usage as the reason behind the delisting. Users holding XRP balances were informed of a “Coinbase Recovery Phase” to retrieve their funds after the delisting. Previously, Coinbase had suspended XRP trading on its platform back in January 2021 due to the SEC’s lawsuit against Ripple Labs.
However, the Coinbase CLO announced its decision to relist XRP after the ruling in the Ripple Vs SEC lawsuit.
Coinbase Vs SEC Lawsuit Suggests A Favorable Outcome For Coinbase
In June, the SEC filed a lawsuit against Coinbase and Binance, alleging that they permitted the trading of unregistered securities and that they should have registered themselves with the regulatory agency.
The initial hearing for this lawsuit took place on July 13th, during which the judge’s questions shed light on her viewpoint regarding the legal dispute. Reports indicate that the judge asked insightful questions and expressed skepticism towards certain responses provided by the SEC.
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