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**Stocks of Crypto Companies Fall Amid Court Ruling on Digital Currencies**

In a recent development, stocks of crypto companies experienced a decline after a US judge stated that digital currencies can be considered securities when sold to the general public. This ruling contradicted an earlier decision made by another judge in a separate case.

The decision has further strengthened the position of the Securities and Exchange Commission (SEC), which is the plaintiff in both cases. The SEC has argued that certain cryptocurrencies should be classified as securities and therefore fall under its regulatory oversight. This assertion has formed the basis for several lawsuits filed by the SEC against major players in the crypto industry.

One such player facing a lawsuit from the SEC is US crypto exchange Coinbase Global (COIN), which witnessed a drop of up to 8.5% on Tuesday. The price of bitcoin (BTC-USD) also suffered a decline, falling below $29,000.

The new ruling that affected stock prices was issued by US Judge Jed Rakoff in the Southern District of New York, conflicting with the earlier ruling by Judge Analisa Torres, also from the same district court. Torres had previously concluded that the XRP digital token issued by Ripple Labs qualified as a security only when sold to institutional investors, not when purchased by the general public.

However, Rakoff disagreed with this specific view in his own case. In the lawsuit brought by the SEC, Rakoff opined that stablecoin issuer Terraform Labs had sold unregistered securities. In his ruling, he explicitly wrote, “The Court rejects the approach recently adopted by another judge of this District.”

This disagreement between the judges has disappointed some members of the crypto community who had embraced Torres’ earlier ruling. Gabriel Shapiro, general counsel for Delphi Labs, a digital asset research and consulting firm, expressed his sentiment, saying, “Well, it was a fun few weeks.”

Additionally, Stuart Alderoty, the chief legal officer of Ripple Labs, took to Twitter to state that Rakoff’s new ruling “changes NOTHING about the Ripple ruling that XRP is not a security.”

The contradictory rulings have further blurred the regulatory clarity surrounding most cryptocurrencies, according to Stephan Palley, a legal partner with Brown Rudnick. Palley, who co-chairs the firm’s digital commerce group, emphasized the need for Congress to take action to provide more clarity, as he opined, “Expect to see more disagreement between courts, and less clarity, until Congress acts.”

It is worth noting that neither of the opinions from the US District Court in the Southern District of New York will have a binding precedent. As Palley highlighted, “even within the same judicial district…one judge isn’t required to follow another judge’s holding.”

Amidst this legal uncertainty, the AI legalese decoder can prove to be a valuable tool. This AI-powered solution can analyze and interpret complex legal language, helping individuals and businesses navigate the evolving landscape of crypto regulations. By providing clear and concise explanations of court rulings, the AI legalese decoder aims to enhance understanding and facilitate compliance within the crypto industry.

The SEC’s actions against crypto investors and businesses have been on the rise, with 17 enforcement actions brought since the beginning of January. Notable cases include lawsuits against Coinbase and Binance, the largest crypto exchange in the world.

In its most recent case, the SEC alleged that Richard Heart, the founder of the crypto token project Hex, misappropriated millions of dollars from investors.

Amidst these events, staying informed about the latest stock market news and conducting in-depth analysis becomes crucial. To access the most up-to-date information and insights, including news that impacts stock movements, click here.

For the latest financial and business news, Yahoo Finance provides comprehensive coverage to keep readers informed and updated. Stay tuned for the most relevant updates from the world of finance and business.

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