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Ripple’s Top Lawyer Celebrates Another SEC Loss

Stuart Alderoty, Ripple’s top lawyer, took a victory lap on the X social media network after federal Judge Amy Berman Jackson dismissed the U.S. Securities and Exchange Commission’s claim that the secondary tokens of BNB, Binance’s exchange token, are unregistered securities. 

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It is worth noting that she cited the New York ruling in the Ripple case in her opinion.  

“The Court notes that several of the district courts presented with SEC enforcement actions involving cryptocurrencies have taken pains to differentiate the alleged investment contracts from the tokens themselves,” the opinion said. 

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Moreover, the opinion says that such a differentiation is consistent with the Supreme Court’s directive that the analysis should be based on various “understandings and expectations” surrounding a particular offering.  

This comes after District Judge Jed Rakoff rejected the Torres ruling in his Terra case last year. According to him, the method of sale should not determine whether or not a certain asset is a security. 

Following the Binance decision, Alderoty now says that the courts are seeing “right through” the SEC’s attempts to “muddy the waters” with its legal theories that are often deemed to be inconsistent. 

Another loss for Binance? 

In the meantime, John Reed Stark, a former SEC official, offered an alternative point of view, painting the recent development as a loss for Binance. 

He has noted that the bulk of the agency’s enforcement action against the exchange will not be able to proceed. 

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Now, as the former SEC official predicts, the regulator will take discovery from market investors in Binance tokens who expected to earn a profit by buying them. 

“Judge Jackson seems to be saying that, in the secondary market, the mindset of the investor is a crucial determinant of the classification of a digital asset as a security and must be pled with particularity,” Stark said.

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