During the SEC and Ripple hearings, District Court Judge for the Southern District of New York Sarah Netburn said that XRP is more like a currency than a security.
This was said during a hearing on the current litigation of the US Securities and Exchange Commission (SEC) and Ripple. At the end of the year, the SEC accused the company of conducting an illegal ICO worth $ 1.3 billion. The agency considered XRP coins to be unregistered securities and claims that the sale of XRP violates US law.
During the proceedings, the SEC tried to obtain personal financial information from Ripple CEO Brad Garlinghouse and Ripple co-founder Chris Larsen. Lawyer Jeremy Hogan, who is not taking part in the case but overseeing the virtual hearing, said Judge Netburn “blew up the process with her sensational comments.”
“As far as I understand, XRP has currency and practical value, which distinguishes it from bitcoin and ether. Therefore XRP has more similarities with fiat currencies than with securities, ”the judge said.
Netburn is not the chief judge in this case, but she does assist New York Southern District Judge Analisa Torres with disclosure and mediation aspects of the case. Hogan commented on Netburn’s words, saying that the judge’s opinion on the usefulness of XRP is exactly what Ripple wants, since currencies and securities are completely different things.
Another surprise at the hearing was the judge’s question: “Is everyone who traded XRP, including you and me, engaged in illegal securities sales?” To this, the SEC representative replied that according to the Securities Act, only Ripple and its affiliates can be accused of illegal XRP sales.
Hogan suggested that in this case, cryptocurrency exchanges that removed trading pairs with XRP could resume trading in this cryptoasset. However, Park Bramhall, senior advisor to Lowenstein Sandler LLP, takes a different view. He said that exchanges are not allowed to re-sell this cryptocurrency. All marketplaces must also comply with Section 4 (a) (1) of the Securities Act.
“Ripple executives need to perk up. After all, the judge just stated what they argued in their documents, ”Hogen said, but the official court documentation for the hearing has not yet been presented.
Earlier, Garlinghouse called the regulator’s lawsuit against his company “an attack on the entire cryptocurrency industry” and an attempt to hinder the development of innovations.
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