Ripple’s CLO Stuart Alderoty makes an analogy between the secondary market sales for a concert ticket and crypto to argue further that XRP is not a security.
In a tweet today, Alderoty shared a ticket to Taylor Swift’s Eras Tour concert, which took place yesterday at Hard Rock Stadium in Miami Gardens, Florida.
Not Every Market Is a Securities Market
The Ripple CLO explained that selling the ticket in the secondary market does not automatically make it a security. He asserted that the same applies to secondary market trading of crypto, suggesting that this type of transaction does not mean the asset should be considered a security.
Alderoty emphasized that not every market in the United States is a securities market. Another image accompanying the tweet is an XRP bracelet, which reads, “XRP IS NOT A SECURITY.”
The secondary market for this ticket doesn’t make it a security—just like trading crypto doesn’t. Not every market is a securities market. pic.twitter.com/qTGlyIHrul
— Stuart Alderoty (@s_alderoty) October 19, 2024
Notably, the Ripple CLO used the analogy to reinforce the argument that not all assets traded in the secondary market should be subject to securities regulations. The tweet is part of Ripple’s defense against the SEC’s classification of its programmatic sales of XRP as a security.
SEC Insists Ripple Programmatic Sales and Other Distributions of XRP Are Securities
Although the SEC no longer alleges that XRP is a security in itself, the regulator has maintained that certain transactions involving the token constitute investment contracts.
The development comes less than 48 hours after the SEC filed its Form C in its appeal against Ripple. As reported earlier, the securities regulator seeks an appellate review of the decisions relating to Ripple’s programmatic sales of XRP on digital exchanges and the company’s use of the token as a payment method.
Recall that Judge Analisa Torres held that these transactions do not constitute investment contracts, a particular type of securities. However, the SEC is not pleased with the decision as it hopes to overturn the verdict in the Second Circuit.
The SEC asked the Second Circuit to review the rulings on Ripple’s programmatic sales on digital exchanges and other distributions of XRP from the beginning without deferring to Judge Torres’ previous verdict.
Ripple to File Form C Next Week
In the meantime, Ripple is expected to file its Form C by next week detailing its cross-appeal pre-argument. The company would challenge the district court’s decision regarding its past institutional sales of XRP, which were deemed securities.
This decision resulted in a $125 million fine against Ripple, with the court placing an injunction on the company’s future sales of XRP to institutional clients.
Unsatisfied with the order, Ripple has filed a cross-appeal to overturn the verdict in the Second Circuit.
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