– A bankruptcy judge refused to determine if CEL token should be classified as a security
– The judge cited the ongoing legal battle between Ripple Labs and the SEC
– Chief US Bankruptcy Judge denied the motion to establish a separate committee for CEL token holders
– The court’s decision does not constitute a conclusion on whether crypto tokens are securities
– Both the SEC and committee can challenge transactions involving crypto tokens
– The SEC accused Ripple of illegally raising $1.3 billion through the sale of XRP
– A US court ruled in favor of Ripple, stating that selling XRP on exchanges does not constitute an investment contract
– Other direct sales of XRP to institutional investors were classified as securities
– Celsius was accused of inflating CEL token price to benefit executives
– The investigation revealed Celsius spent $558 million to purchase CEL tokens on open markets
– The inflated price favored top company executives who sold millions of dollars worth of CEL tokens.
A bankruptcy judge has declined to classify Celsius Network’s native token, CEL, as a security, citing the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC). Otis Davis, a CEL token holder, had requested that the judge recognize the legal precedent set in the Ripple case in order to establish a separate committee for CEL token holders. However, the judge denied the motion, stating that the court’s decision did not definitively determine whether crypto tokens or transactions involving them should be considered securities under federal securities laws. The judge’s order also reserved the right for the SEC and the committee to challenge any transactions involving crypto tokens. The legal dispute between the SEC and Ripple began in 2020 when the agency accused Ripple of illegally raising $1.3 billion through the sale of its XRP token. Recently, a US court ruled in favor of Ripple, stating that selling XRP on exchanges does not constitute an investment contract. However, the court also determined that direct sales of XRP to institutional investors qualified as securities. This ruling has been referenced in other court cases, including one involving Terraform Labs. Earlier this year, an examiner appointed by the court claimed that Celsius inflated the price of its CEL token to benefit its executives. The examiner found that Celsius spent over $558 million to purchase CEL tokens in open markets, causing the token price to surge. This inflated price reportedly benefited top company executives, including the CEO and co-founder, who sold significant amounts of CEL tokens.
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