Judge Disagrees With The Ripple Ruling And Denies The Move To Dismiss The Terraform Lawsuit

The verdict in the Securities and Exchange action against Ripple was in contrast with the Howey test's thorough interpretation provided by Judge Jed Rakoff. After a U.S. court refused Terraform Labs' plea to dismiss the case on July 31, the SEC's legal action against the company is expected to move forward. 

Source: profitgid.ru

The judge also overturned a finding from another judge, who found that Ripple did not break securities laws due to how they sold their stock while issuing the order. On February 16, the SEC initially brought legal action against Terraform Labs and Do Kwon, the company's creator, accusing them of orchestrating a multi-billion dollar digital asset securities scam.

Legal counsel for Terraform Labs submitted a move to dismiss the lawsuit in April, and more supporting documentation was submitted in June.  Judge Jed Rakoff of the Southern District Court of New York determined the following in denying the defendants' request to dismiss. All well-plead accusations must be considered as true for the intent of this motion, and the SEC must be given the benefit of the doubt on any inferences that may reasonably be made from them.

Representatives for Terraform Labs claimed that the SEC lacked authority over both the business and its founder in a prior move for dismissal. Additionally, it disputed the opinion of the agency that some coins, including Terra Classic (LUNC), TerraUSD Classic (USTC), and Mirror Protocol (MIR), are securities. Moreover, it claimed that Congress is asking the SEC to wait for Congress to act in addition to engaging in robust debate over how cryptocurrency should be regulated. The agency's newly released emails about previous SEC director William Hinman that were relevant in the agency's claim against Ripple Labs were also cited, along with a procedural problem in the agency's lawsuit against the biggest exchanges.

According To Ripple Labs' Legal Leader, The SEC Appeal Might Increase Ripple's Victory

The difference between these coins (MIR and LUNA) depending on how they were sold was also not made by the court. This strategy, which claimed that XRP was a commodity when traded on the secondary market, gave Ripple some success. The SEC may benefit from its denial here.

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