An arrest, a ruling, a rally: Crypto’s wild day in the courts

financialpost.com:

It was a day that started with something of a bang: the charismatic Alex Mashinsky, former chief executive officer of bankrupt crypto lender Celsius Network under arrest and charged with fraud.

In a flurry of enforcement activity, the U.S. Department of Justice, Securities and Exchange Commission, Commodity Futures Trading Commission, and the Federal Trade Commission all filed lawsuits Thursday against both Mashinsky and Celsius itself.

Allegations against Mashinsky ranged from pumping up the price of CEL, the lender’s native token, to wire fraud. Mashinsky has pleaded not guilty and will be released on bail after agreeing to a US$40 million personal recognizance bond.

Then, shortly before noon, a judge issued a long-awaited ruling in the case of the SEC v Ripple Labs Inc. that sent crypto Twitter into a frenzy and token prices soaring. U.S. District Judge Analisa Torres held that XRP, the token associated with Ripple Labs and central to the case, is a security when offered to institutional investors but not the general public.

“Institutional buyers would have understood that Ripple was pitching a speculative value proposition for XRP with potential profits to be derived from Ripple’s entrepreneurial and managerial efforts,” the judge wrote.

But Torres ruled that finding didn’t apply to programmatic investors, meaning the broader public. She said there was no evidence that such investors could parse the many statements made by Ripple about XRP, and found that many statements cited by the SEC may not have been shared with the broader public.

Whether cryptocurrencies are securities has been a major question hanging over the industry, which has long fought efforts to regulate it by arguing that the tokens do not meet the