ANALYSIS: Ripple Makes No Waves for State Crypto Policing

The recent Ripple Labs decision brought excitement to the world of digital assets by breaking the Securities and Exchange Commission’s winning streak in having digital assets categorized as securities.

Despite another court’s disapproval of Ripple’s holding, some digital assets—at least for now—may not be by themselves securities under federal law’s Howey test defining securities. Thus, buying and selling them—without more—won’t require securities registration. And if Ripple is affirmed on appeal, many SEC actions for illegal sale of unregistered securities, such as the majority of charges against digital asset exchange Coinbase, are likely to fail.

But the ruling’s reach may ...