A month ago, "Ripple is not a stock"
According to Bloomberg News on the 1st (local time), Judge Jed Lakoff of the Manhattan Federal Court in New York dismissed Kwon's motion to dismiss the lawsuit filed by the US Securities and Exchange Commission (SEC) against Terraform Labs and founder Do-hyung Kwon on the 31st of last month. “We refuse to distinguish whether cryptocurrencies are securities or not based on the way they are sold,” it said. The SEC filed a lawsuit against Kwon and others in February on charges of fraudulent provision and sale of bearer securities in connection with the collapse of Terra, which lost $40 billion in market value. Mr. Kwon argued that Terra, a stable coin, was not a security, but it was not accepted, so the main lawsuit proceeded.
This decision is contrary to the New York District Court's ruling on the 13th of last month in a lawsuit related to cryptocurrency Ripple, "Cryptocurrency Ripple is a security when sold to institutional investors, but not to the general public." According to the Supreme Court's 1946 precedent that "whether it is a security or not is determined by whether the purchaser bought it with the expectation of a dividend," the district court held that the purchase of a coin by an ordinary person was not an act of buying a security. The district court ruling was accepted as a’victory for the cryptocurrency industry’, but the situation reversed in just one month. Targeting the district court's ruling last month, the federal court in Manhattan emphasized that it "rejects the approach recently adopted by other judges in the district in similar cases." The purpose is that cryptocurrency is regarded as securities regardless of the method of sale.
The Manhattan federal court decision bolstered the SEC's argument that cryptocurrencies are securities and that cryptocurrency exchanges must comply with federal securities laws. The SEC sued not only Kwon but also Coinbase, the largest exchange in the US, for violating the Securities Act.
As the news of the Manhattan federal court's ruling became known, the bitcoin price showed a weak trend. As of 5 am on the 2nd, based on Coordinated Standard Time, the price per bitcoin was $29,656.9, down about 0.13% from 24 hours ago.
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