Judge Cites Ripple Case in Rejecting CEL's Security Classification in Bankruptcy Proceedings
A bankruptcy judge has refused to determine whether CEL, the native token of Celsius, should be classified as a security, citing the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC).
Otis Davis, one major CEL token order, had previously asked the judge to "recognize the legal precedent that has been set in the Ripple/XRP case" in order to establish a separate committee for CEL token holders.
However, Chief US Bankruptcy Judge Martin Glenn denied Davis' motion, among others, on Friday.
He clarified in his order that the court's decision did not constitute a definitive conclusion on whether crypto tokens or transactions involving them should be considered securities under federal securities laws.
The order explicitly reserved the right for both the SEC and the committee to challenge any transactions involving crypto tokens.
“Nothing in the Motions, this Order, or announced at the Hearing constitutes a finding under the federal securities laws as to whether crypto tokens or transactions involving crypto tokens are securities," the judge said.
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 XRP, claiming it to be an unregistered security.
Last month, a US court ruled in favor of Ripple in the ongoing lawsuit brought by the SEC, claiming that selling XRP on exchanges in itself does not constitute an investment contract.
The ruling, issued by Judge Analisa Torres of the US District Court for the Southern District of New York, stated that the “offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts.”
However, she also determined that other
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