Ripple vs SEC Update: A New Chapter in the XRP Security Saga?

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In a recent X post, a pseudonymous crypto researcher known as Dark Horse ignited a debate regarding the legal standing of XRP. He argues that Judge Torres has not categorically labeled XRP as a security or commodity. 

With these comments, Dark Horse has single-handedly challenged the crypto community’s widely held belief that XRP has legal clarity. Let’s look at his arguments – 

Need some X Legal help please to debate this..
I believe that Judge Torres has not determined XRP token as a security or commodity
I also believe that she did not define XRP as not a security either
Judge Torress stated that XRP can not be a Transaction.… pic.twitter.com/3DzKrG4BXD

— ĐΛRKHØRSΞ (@DarkhorseDNME4) March 7, 2024

XRP Price Analysis

Dark Horse’s argument revolves around Judge Torres’s statements. He focuses on the fact that while XRP may not be defined as a security, the judge has not explicitly labeled it otherwise. Quoting Torres, Dark Horse points out, “XRP, as a digital token, is not in and of itself a ‘contract, transaction, or scheme’ that embodies the Howey requirements of an investment contract.” 

Dark Horse has interpreted this as a lack of a clear, specific definition regarding XRP’s classification.

On the contrary, Utility, another crypto enthusiast, rebuts Dark Horse’s claims. Utility contends that XRP has been found “not guilty” of being a security. 

The ongoing allegations against Ripple pertain to selling unregistered securities. Utility contended that Dark Horse’s statement – “every crypto has legal clarity,” is inaccurate. It doesn’t apply universally, especially in the case of Proof of Stake (PoS) protocols.

Analyzing Court Documents

Quoting from the court filings, it’s evident that Judge Torres didn’t outright categorize XRP as a security. 

The court differentiated between Ripple’s sales of XRP on exchanges (not securities) and certain Ripple sales under written contracts (considered investment contracts and thus securities). 

Dark Horse’s contention centers around the court not explicitly defining XRP’s standalone nature. While Dark Horse insists that XRP lacks a clear definition beyond not being a security, Utility points to the court’s findings and ongoing investigations into Ripple’s sales practices.