According to U.Today, Ripple recently achieved a significant legal victory as most claims in a class action lawsuit concerning XRP were dismissed. The ruling by the Court for the Northern District of California has reduced the case to a minor state law claim related to allegedly misleading statements. The ongoing debate's central issue is whether XRP should be classified as a security. Although the Californian ruling is a victory for Ripple, it is suggested that under certain circumstances, XRP could potentially be considered a security. This view contrasts with Judge Torres' previous ruling in New York that XRP does not qualify as a security when sold to institutional investors.
Legal experts Fred Rispoli and Marc Fagel have shared their thoughts on the implications of these developments. Rispoli, a strong supporter of XRP, underscored the potential impact of California law on the definition of securities in light of the court's interpretation. On the other hand, Fagel, drawing from his SEC experience, pointed out the nuanced federal and state considerations in determining whether XRP transactions fall under securities regulation.
Rispoli noted in response to the ruling, 'The court's decision leaves open the possibility that XRP could be classified as a security under California law, if not federal law.' Fagel disagreed, emphasizing that while California's adoption of federal standards such as the Howey test influences local interpretations, the broader implications for federal courts seeking guidance remain limited.