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Pryor Cashman Partner Jeffrey Alberts, who co-heads the
firm’s FinTech Group, spoke with Law360, Crowdfund
Insider, and Fortune about a Federal Court ruling in
the U.S. Securities and Exchange Commission enforcement action
against Ripple Labs, creator of the XRP crypto token.
In “Ripple, SEC Claim Victories In Split Ruling On
Token’s Status,” Jeff tells Law360 that the
decision, which said that the XRP token was a security when sold
directly to investors but was not a security when it traded on
public exchanges, a “huge blow to the SEC’s ability to
regulate digital asset sales.”
Jeff expanded on this for Crowdfund Insider,
saying:
“The court rejects the SEC’s position that people
who bought XRP tokens speculatively as investments over digital
asset exchanges were engaged in securities transactions, reasoning
that these purchasers could not reasonably expect Ripple to act to
increase the price of XRP. This is a huge blow to the SEC’s
ability to regulate digital asset sales,” said Alberts.
“The court’s ruling that sales of XRP on public exchanges
were not securities transactions also is a huge blow to the
SEC’s ability to regulate other entities in the cryptocurrency
space, such as exchanges and other platforms that allow users to
transmit cryptocurrencies.”
Speaking to Fortune, Jeff noted that the underlying
question of whether tokens are securities or not “has
previously led to widespread confusion.”
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