Ripple and XRP: to be (security) or not to be (security)

Ripple, the company behind the XRP currency, has made a point in the past to convince everyone that it is not a security. Brad Garlinghouse, CEO of Ripple, has been talking about this problem several times. In an interview with CNBC, when asked about a recent legal action by former XRP owners who sued Ripple stating that it is actually a security, he stated the following:

"Whether or not XRP is a security should not be dictated by a lawsuit – the SEC is the governor of this – I think it's very clear that XRP is not a security – it exists independently of Ripple's business. If Ripple, the company will close tomorrow, XRP will continue to exist. "

This sentiment was also taken up by Ripple's chief market strategist, Cory Johnson. Mr. Johnson answered the questions if the XRP were to be regulated as a security by saying:

"We are absolutely not a security, we do not meet the standards for what a security is based on the history of jurisprudence."

As TheBlock explains, one of the ripple lawsuits, Greenwald v. Ripple, was removed from Ripple to the federal court, but then again postponed before this fall. Ripple managed to remove the case a second time using the fact that Zakinov had been consolidated with another case as an excuse. As the plaintiffs set in motion for precautionary custody:

"Despite this clear directive of the Court, the defendants again misappropriated the Greenwald action to this Court in accordance with the CAFA on November 7, 2018 after it had been inadvertently, without practice of movement, consolidated with the & rsquo; connected action presented by Vlad Zakinov ("Zakinov") and David Oconer ("Oconer") who asserts only non-removable state law requests on behalf of California residents only (hereinafter, "State law action"). skills in the game, the Defendants removed this action and the Law Action of the State despite having been informed by the lawyers of the actor in both cases that they believed that the consolidation was wrong and after being informed of the next motion of Greenwood to deconsolidate The defendants also refused to wait to remove these actions until after the state court judge could be informed of the concern of the plaintiffs that consolidation was wrong ".

Stephen Palley, renowned lawyer and author of this piece on TheBlock, lights up further:

"The plaintiff argues (1) that the case should be deferred to allow the administrative consolidation to be questioned, (2) that consolidation was not a voluntary act by the plaintiff that made it removable under the Class Action Fairness Act; and (3) that the underlying operating claim is not removable.While the Defendants have not yet responded, their argument will be that by consolidating Greenwald with removable legal actions the State Court judge did something that created a federal jurisdiction that was not He existed.

What is the agreement between the federal court and the state court? tl; dr – defendants like the federal court are better. "

In essence, it is only a matter of postponing the verdict until Court solves the problem and, as Palley concludes, "which court should be referred to."

Most lawmakers look back to "The" Howey Test "to determine if something is a title or not.This test was created by the Supreme Court to determine whether certain transactions qualify as" investment contracts. "In that case, therefore, pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, such transactions are considered as securities and therefore subject to certain information and registration requirements.

Ripple has changed some of his critical statements from the past, according to The Block founder and CEO Mike Dudas. Dudas did extensive research on the company, citing Ripple's position on key issues relating to the company and its cryptocurrency.