U.S. District Judge Jed Rakoff, who is overseeing the Securities and Exchange Commission (SEC) case against Terraform Labs has rejected an approach used in last month’s ruling in the SEC’s case against Ripple Labs.
This decision stands in contrast to the verdict by U.S. District Judge Analisa Torres in the Ripple case, where a significant distinction was drawn based on how the assets were sold.
According to the summary of the Ripple verdict, coins sold directly to institutional investors were considered securities, while those sold through secondary market transactions to retail investors were not.
However, this differentiation has now been rejected in the ongoing Terraform Labs case, which now puts the Ripple ruling into question.
The implications of this legal stance have already begun to ripple through markets. In an immediate reaction, shares of COIN dropped 3%.
