Some crypto assets are securities, Manhattan judge says, complicating Coinbase and Ripple cases

A Manhattan federal judge said cryptocurrencies are securities regardless of whom they are offered to, contradicting a prior ruling on cryptoasset Ripple.

Some crypto assets are securities, Manhattan judge says, complicating Coinbase and Ripple cases

A federal judge has ruled that cryptocurrency is a security regardless of context.

The same Manhattan federal courts that issued a controversial ruling on a crypto-asset called Ripple, which said the opposite, delivered the opinion.

Private companies, legislators, and regulators have been arguing over whether cryptocurrencies should be considered securities.

In an opinion, a Manhattan federal judge stated that cryptocurrencies were securities no matter how they are traded. This allows the Securities and Exchange Commission (SEC) to bring securities charges against Terraform Labs and Do Kwon, its founder. It has wide-ranging implications for crypto legislation and litigation.

The SEC's lawsuit against Ripple, as well as the crypto exchange Coinbase, has been complicated by U.S. district judge Jed Rakoff’s ruling on Monday.

The SEC had claimed that Coinbase was engaged in unregistered offering and sale of securities. Coinbase denies listing any crypto assets securities.



In the early morning of Tuesday, shares are down 8%.

An opinion that contradicts itself

earlier ruling

The same district court that said


In some circumstances, may not be classified as a security. The previous opinion will remain unchanged.

The Ripple decision was seen as a victory by the cryptocurrency industry, because it stated that a cryptocurrency can be or not be a financial instrument depending on who is buying it. In cases against Binance Coinbase and Kraken, the SEC argued that many of the cryptocurrencies listed on popular platforms are securities.

Rakoff, of the Court, said that it "refuses to make a distinction based on how these coins are sold. Coins sold directly to institutions are securities while those sold via secondary market transactions to retailers are not."

prior ruling


"In doing this, the Court rejects an approach recently taken by another judge in this district in a similarly-themed case."

Kwon, Terraform Labs and other cryptoassets were sold and offered without registration. This included Luna and TerraUSD stablecoin.

Rakoff's opinion supports the arguments of some legislators who claim that legislation on crypto markets is necessary to clarify the roles of regulators and courts.

The SEC has also pursued a number of other crypto firms for the alleged sale and offer of securities that were not registered, including


Gemini and Genesis

This report was contributed by Lora Kolodny, a CNBC reporter.