The founder of the Cardano (ADA) network, Charles Hoskinson, has spoken out about the appeal filed against Ripple by the US Securities and Exchange Commission (SEC).
In a humorous response on social media platform X, Hoskinson suggested that the famous Howey Test may need to be replaced by a ‘Ripple Test’. By this he refers to the recent legal developments surrounding Ripple and their possible impact on the broader crypto market.
Hoskinson’s response followed the SEC’s Oct. 2 appeal. This specifically concerns Judge Analisa Torres’ ruling from July 2023, in which she ruled that the programmatic sale of XRP on exchanges is not covered by securities legislation.
The role of the Howey Test
The Howey Test played a crucial role in the ruling. This legal framework, which has been used since 1946, determines whether a transaction is considered a security. Under the test, a transaction must meet four criteria to fall under securities law. This assessment often plays a key role in crypto cases, including the conflict between the SEC and Ripple.
Future of the ‘Ripple Test’
If the SEC’s appeal fails and Judge Torres’ ruling is upheld by the Court of Appeals, it could set a precedent for future crypto cases. This could potentially make the ‘Ripple Test’ the new standard for crypto assets. However, a definitive ruling still seems far away; for the time being, a final decision is not expected until 2026.
Ripple’s response
Ripple’s Chief Legal Officer, Stuart Alderoty, expressed his disappointment with the SEC’s decision to appeal. However, he emphasized that Ripple is ready to take the fight to the US Court of Appeals. Moreover, Ripple itself is also considering a counter-appeal, because the company does not agree with the fine and the sales restrictions imposed.
Source: https://newsbit.nl/charles-hoskinson-reageert-met-humor-op-beroep-van-sec-in-ripple-zaak/
