David Schwartz, the CTO of Ripple, has called for legislative action to clarify regulations surrounding digital assets in the United States. In a series of tweets, Schwartz emphasized the need for a balanced approach to regulation and expressed skepticism that courts alone could effectively define what constitutes a security in the context of digital tokens. He argued that without legislative input, there may be confusion and inconsistency in the classification of digital tokens as securities. Schwartz highlighted the ongoing debate around the Howey test, which is used to determine if certain transactions qualify as investment contracts and are subject to securities laws. He noted that the test has evolved over time, with subsequent cases broadening its understanding to include the influence of market forces. Schwartz also questioned why certain items, such as early works of art or collectibles, are not considered securities despite meeting the criteria set by the Howey test. The court ruling in July found that Ripple’s programmatic sales and distributions of XRP were not securities, but sales to institutional buyers could be considered securities due to their understanding of the link between XRP’s price and Ripple’s performance. Overall, there is a growing consensus that legislative action is necessary to provide clarity and ensure fair and effective regulation in the digital asset space.

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Information	Details
Geography	North America
Countries	🇺🇸
Sentiment	neutral
Relevance Score	1
People	David Schwartz
Companies	Congress, Joiner Corp, Ripple, SEC, Howey Co
Currencies	XRP
Securities	None