A former SEC official has criticized the recent court ruling in favor of Ripple Labs, stating that it is “troublesome on multiple fronts.” The ruling determined that Ripple’s XRP token was a security when sold to institutional investors but not in other types of sales. The judge argued that institutional investors had a reasonable expectation that Ripple would use the capital to improve the XRP ecosystem, while individual investors using exchanges could not expect the same. The former official believes that the decision establishes a discriminatory class of quasi-securities based on investor sophistication and goes against investor protection principles. They anticipate an appeal and potential reversal of the ruling.

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