Judge Analisa Torres ruled that Ripple’s sale of XRP to the public and distribution of tokens did not constitute an offering and sale of investment contracts.
These include “programmatic sales,” where XRP is offered to general buyers, and “other distributions,” where XRP is offered to people for free.
The court concluded that the former did not meet Stage 3 of the Howie test because general purchasers may not have been aware of various statements and marketing campaigns that linked the token’s price performance to the company’s performance. attached.
The latter, on the other hand, failed the Howey test because the recipient never invested in the asset.
However, the court ruled that institutional buyers were “sophisticated” enough to understand the link between the price of XRP and the company’s performance, and that all XRP sales offered to institutional investors were considered an investment. It was concluded that the sale amounted to a contract sale.
Additionally, Ripple has been selling and promoting its tokens directly to institutional investors, who had a reasonable expectation that they would benefit from their investment.
Judge Post ruled that Ripple’s XRP programmatic sale was ‘not a security’. His XRP, up 28%, first appeared on his CryptoSlate.