🔍 Recently, former SEC employee John Reed Stark revealed details about the lawsuit between Ripple and the SEC in a post on LinkedIn.
He claims:
"Ripple's victory, while partial, comes on shaky grounds. It's a blow not only to the SEC, but also to its chairman Gary Gensler."
💼 The court's decision on the proceedings between the SEC and Ripple is divided into three categories:
Institutional Sales: This category of sales to sophisticated investors and individuals through a written contract is considered collateral.
Programmatic Sales: The second category involves exchange sales of XRP, and the court has ruled that XRP is not a security.
Other sales: These include sales of XRP to insiders, retail investors through exchanges, and founders. In this case, the XRP token is not a security.
🤔 According to a former SEC official, this categorization leads to problems on several fronts.
He says:
"The Ripple decision is problematic on several fronts. It establishes a class of quasi-securities that differentiates and morphs depending on the sophistication of the investor purchasing the securities. It is illogical, inconsistent with SEC case law, and unprecedented in this context."
📉 As it turns out, the SEC’s decision to recognize XRP as a security and to renounce this status depending on the class of investors raises doubts about the protection of investors’ interests. Stark believes that such an argument contradicts the basic principles of investor protection and is incorrect.
🚫 According to Stark, this decision results in only wealthy investors receiving support and the possibility of compensation for damages from the SEC, while less sophisticated and retail investors are left defenseless.
He declared:
"In other words, rich people get support and redress, while poor people get disclaimers. This seems unfair and goes against the very foundation of American securities law."
⏳ It is possible that the decision in favor of Ripple and XRP will be reversed, however, this will take time and go through all the necessary procedures before the final decision. The legal battle continues, and the outcome of this case awaits the entire cryptocurrency world. ⚔️💼
