The U.S. judge responsible for the Terra case dismissed the ruling that "XRP is not a security when sold to the public in the secondary market."

ChainCatcher news, according to Bloomberg, U.S. District Judge Jed Rakoff has allowed the U.S. Securities and Exchange Commission (SEC) to continue its case against Terraform Labs and its founder Do Kwon, stating that he refuses to distinguish between public sales and institutional sales in the Ripple case, saying "the court declines to distinguish based on the manner of sale of these tokens, namely that tokens sold directly to institutional investors are considered securities, while those sold to retail investors through secondary market transactions are not," thus creating a divergence from a previous ruling in July by another judge, who had ruled that XRP tokens sold to the public on the secondary market are not securities.

ChainCatcher previously reported that in mid-July, the U.S. District Court for the Southern District of New York ruled against the SEC's allegations against Ripple, determining that XRP itself does not embody the "contract, transaction, or scheme" required by the investment contract Howey test, while Ripple's institutional sales of XRP constitute an unregistered investment contract offer and sale.