Jinse Finance reported that Manhattan federal judge Jed Rakoff rejected the preliminary ruling of judge Analisa Torres on the Ripple case. Torres previously ruled that Ripple Labs did not violate securities laws. Part of what makes XRP available to retail investors on secondary platforms is that buyers don’t know whether their funds are going to Ripple or a third party.


Judge Rakoff said that, according to the court, whatever their expectation of profit could not have been attributable to the efforts of the defendants, but the Howey test made no such distinction between buyers. It makes sense to do so. Whether the purchaser purchased the tokens directly from the defendants or through a secondary resale transaction made no difference to whether a reasonable individual would view the tokens objectively. Defendants' conduct and representations demonstrate a commitment to profit through their efforts.
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