The story of the initial coin offering in American law is a play in four acts: Kik Interactive, Telegram, LBRY and Ripple Labs.
If Ripple loses, as I expect it will sooner or later, its defeat would be highly symbolic. The company and its associated protocol are among the longest-running and significant cryptocurrency projects in the world. XRP is practically a household name. The advantages of this round-robin approach, it was claimed by Ripple’s proponents, are that the network can process many more transactions at far lower cost. The disadvantages, detractors say, are that it requires a higher degree of trust and is not truly decentralized.
Boiling down Ripple’s argument in this case to a single line on Twitter, company counsel Stuart Alderoty resorted to something akin to. He argued, among other things, that there is no investment contract because there is no formal contract between Ripple and XRP purchasers, and that the tokens were sold for consumptive use.
In Telegram, Judge P. Kevin Castel pointed out that “Congress intended the application of to turn on the economic realities underlying a transaction, and not on the name appended thereto,” ).