The CLO of Ripple has reacted to Coinbase Legal Officer’s address of the confusion surrounding XRP security status following Judge Torres’ ruling.
Shortly after Judge Analisa Torres ruled on the multi-year Ripple vs. SEC lawsuit, which brought clarity to the status of XRP, Coinbase Chief Legal Officer (CLO) Paul Grewal took to Twitter to address the confusion surrounding the ruling.
Grewal’s tweet aimed to provide a clear and concise statement regarding the security classification of XRP, emphasizing that it is never considered a security.
In response to the ambiguity that emerged following Judge Torres’ ruling on Ripple’s XRP sales, Grewal remarked: “Don’t be misled that Judge Torres ruled that sometimes XRP is a security and sometimes it isn’t. That’s exactly the opposite of what she ruled: XRP itself is NEVER a security.”
Don’t be misled that Judge Torres ruled that sometimes XRP is a security and sometimes it isn’t. That’s exactly the opposite of what she ruled: XRP itself is NEVER a security. “ Page 15: "XRP, as a digital token, is not in and of itself a ‘contract, transaction[,] or scheme’…
— paulgrewal.eth (@iampaulgrewal) July 14, 2023
Grewal referred to a specific page in the court ruling, highlighting the judge’s statement that XRP, as a digital token, does not meet the requirements of an investment contract as defined by the Howey test.
Stuart Alderoty, Ripple’s Chief Legal Officer, echoed Grewal’s sentiments, affirming the Coinbase CLO’s statement. According to him, there’s “no question” on this fact. Alderoty’s agreement with Grewal further solidified the assertion that XRP should not be regarded as a security.
No question. Absolutely no question. https://t.co/CcHmhEwJHv
— Stuart Alderoty (@s_alderoty) July 14, 2023
To reinforce Grewal’s position, a Texas-based former bankruptcy lawyer joined the conversation on Twitter. This legal expert, with experience in bankruptcy law, concurred with Grewal’s tweet and offered his own perspective.
The lawyer argued that the SEC’s claims, suggesting that certain tokens are securities, are unfounded. According to the lawyer, while tokens themselves are never securities, they can be sold through investment contracts, which fall under the security classification.
Deaton Consistently Maintained This
It is noteworthy that the argument put forth by the Texas-based bankruptcy lawyer aligns with the viewpoint of John Deaton, a pro-XRP lawyer who acted as an amicus curiae in the SEC vs. Ripple lawsuit, representing over 75,000 XRP holders.
Deaton has consistently maintained that XRP should not be considered a security on its own. However, the lawyer affirmed that it is possible that some of Ripple’s sales of XRP constituted security offerings. Notably, the judge noted that these sales are past institutional sales.
Before the ruling, Paul Grewal agreed with Deaton’s stance on the matter. However, Coinbase could not relist XRP due to the legal conditions surrounding the asset. The exchange swiftly relisted XRP a few hours after Judge Torres’ ruling confirming that XRP is legally regarded as a non-security.