A former official at the U.S. Securities and Exchange Commission (SEC) believes that Ripple Labs’ legal situation is about to worsen after a recent court decision. The Southern District of New York District Judge, Jed Rakoff, denied a motion to dismiss a securities fraud lawsuit against Terraform Labs by the SEC. This ruling raises concerns about the status of Ripple’s XRP cryptocurrency as a security token. The SEC can now proceed with its case against Terraform Labs and its founder, rejecting arguments that the regulator lacked jurisdiction. Ripple’s chief legal officer, Stuart Alderoty, assured the XRP community that the rejection of the Ripple verdict was due to specific facts of each lawsuit, not a sweeping judgment on crypto assets.

AI Sentiment: Negative