In a lawsuit filed by Terraform Labs against the SEC, Judge Rakoff has denied a motion to dismiss the case and expressed disagreement with the recent ruling in Ripple’s case. Terraform Labs tried to use Ripple’s case ruling as an argument for the dismissal of their own lawsuit, but Judge Rakoff rejected this approach. Although Judge Rakoff’s criticism does not overturn Judge Torres’ decision in the Ripple case, it may increase the likelihood of the SEC filing an appeal. The judge’s comments suggest that the Ripple decision applied additional tests not part of the Howey test, which may impact future cases.

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