Editor’s Note: The NYU Law Program on Corporate Compliance and Enforcement is following the recent decision in SEC v. Ripple Labs, Inc., in which the district court decided competing summary judgment motions for both the SEC and Ripple by holding that contractual sales of XRP, Ripple’s native token, to institutional investors were securities while the XRP token itself was not. In this post, attorneys at Latham & Watkins LLP take a deep dive into the court’s holdings and their implications for the crypto industry.
by Jack Barber, Jenny Cieplak, Benjamin Naftalis, John Sikora, Stephen P. Wink, Douglas K. Yatter, Luca Marquard, Adam Zuckerman, and Deric Behar
Top left to right: Jack Barber, Jenny Cieplak, Benjamin Naftalis, John Sikora, and Stephen P. Wink.
Bottom left to right: Douglas K. Yatter, Luca Marquard, Adam Zuckerman, and Deric Behar.
(Photos courtesy of Latham & Watkins LLP)
A bifurcated decision in a highly anticipated digital assets enforcement action may not provide the clarity that market participants want or need.
On July 13, 2023, Judge Analisa Torres of the US District Court for the Southern District of New York issued an order on motions for summary judgment in the civil enforcement action brought by the Securities and Exchange Commission (SEC) on December 22, 2020, against Ripple Labs Inc. (Ripple), its former CEO (Christian Larsen), and its former COO and current CEO (Brad Garlinghouse). The SEC’s claims include the unlawful offer and sale of securities in violation of Section 5 of the Securities Act of 1933 (the Securities Act), as well as aiding and abetting the allegedly unlawful offer and sale of securities by the individual defendants (see this Latham blog post for more information).