FameEX Hot Topics | Former SEC Official Expects Positive Result in Terra Lawsuit and Maintained Rejection of Ripple/XRP Ruling

John Reed Stark, a former high-ranking official at the U.S. Securities and Exchange Commission (SEC) who previously led the SEC's Office of Internet Enforcement, has offered insights and predictions regarding ongoing legal battles involving cryptocurrency companies. Stark, who currently serves as the president of cybersecurity firm John Reed Stark Consulting, shared his views in a comprehensive social media post on the platform X.

Stark's analysis centers on two major legal cases: the SEC's lawsuit against Terraform Labs and its co-founder Do Kwon, as well as the SEC's lawsuit against Ripple Labs Inc. and the cryptocurrency XRP. In both cases, the central issue revolves around whether certain cryptocurrency tokens should be classified as securities, subject to SEC regulation.

In the case of the SEC's legal battle with Terraform Labs, both the SEC and the defendants have filed competing summary judgment motions, each seeking an early legal victory on the question of crypto token classification. Stark expressed a strong belief in a "big win" for the SEC in this Terra lawsuit. Furthermore, Stark anticipated that District Judge Jed Rakoff, who presides over the Terra lawsuit, would continue to reject the legal reasoning behind District Judge Analisa Torres' previous ruling in the SEC's case against Ripple and XRP. Notably, Judge Rakoff had publicly disagreed with Judge Torres' approach, describing it as inconsistent with his own legal perspective.

Stark's commentary highlighted Judge Jed Rakoff's exceptional reputation as a securities law expert. He is regarded as one of the most distinguished and experienced jurists in this field, not only within the Southern District of New York (SDNY) but potentially throughout the entire U.S. federal court system. Stark anticipated that Judge Rakoff would persist in challenging Judge Torres' Ripple decision, not only during the summary judgment phase but also in future cases that involve the application of securities laws to digital assets.