John Reed Stark, a formidable former Securities and Exchange Commission (SEC) figure, weighed-in heavily against a recent ruling relating to Ripple Lab in an attention-grabbing LinkedIn analysis. Breaking down Judge Analisa Torres’ judgment handed down on 13th July 2021, Stark examined the point of views on which she arrived at her decision of siding with Ripple in a lawsuit brought against the company by the SEC at the start of 2020, alleging that its XRP (XRP) token can be classified as a security.
Questioning the decision, Stark suggested that it establishes a “class of quasi-securities that discriminates” based on the knowledge-level of an individual investor and disregards the predominant security law safeguard for non-professional traders that “they can’t fend for themselves”. He furthered that “the Ripple Decision holds that the same exact token can be a security sometimes but not a security other times”, a point that seems counter to the baseline principles of securities; “Stock is always stock – it can’t transmogrify into ‘not stock,” he emphasized. Moreover, the former SEC ranks believed that Judge Toro’s ruling is likely (and potentially “ripe”) for appeal and reversal by the SEC.
The crypto community welcomed the declaration with elation and Ripple’s Chief Executive Officer, Brad Garlinghouse saw the judgement, concerning institutional sales as “(…) the smallest piece” than that which constituted the Ripple complaint, inferring that the SEC’s appeal of the retail sale ruling could actually prop up Judge Toro’s finding.
No doubt the ever-shifting rules and potential implications on cryptocurrency regulation stirred significantly by the aforementioned unusual but understood nomination verdict will have different though simultaneously far-reaching repercussions; today, while dissecting legal rulings it prompts the exegesis, “Does SEC Chair Gary Gensler have the final say?” Submit your written ideas on the topic in Crypto Regulation Magazines for a chance to be featured worldwide.