In a landmark ruling, Ripple Labs emerged triumphant from the United States District Court for the Southern District of New York on July 13. Judge Analisa Torres partially ruled in favor of the company against the Securities and Exchange Commission (SEC) in a case initially instituted in 2020.
The verdict signified a much-awaited victory for Ripple Labs, who have been embroiled in legal complexities since December 2020. The SEC had filed a lawsuit against the company and its two chief executives, Brad Garlinghouse and Chris Larsen, alleging the illegal offering of unregistered securities.
A Judicial Turning Point: XRP Deemed Not a Security
Judge Torres ruled that the XRP token is not a security, albeit this ruling was specific to programmatic sales on digital asset exchanges. The court documents, filed on the same day, disclosed, "Defendants’ motion for summary judgment is GRANTED as to the Programmatic Sales, the Other Distributions, and Larsen’s and Garlinghouse’s sales, and DENIED as to the Institutional Sales”.
The SEC had been insistent on imposing additional regulatory stipulations on Ripple, arguing that XRP was a 'security.' Ripple Labs, however, had been relentlessly defending its position, with CEO Garlinghouse demonstrating noteworthy defiance of SEC charges.
This case, which has been unfolding over the past three years, has attracted considerable attention, including the release of the 'Hinman Papers' and an ensuing torrent of debate around the nature of cryptocurrencies.
Impact on the Crypto Market: XRP Soars
In the immediate aftermath of the court's decision, the price of XRP surged by an impressive 16 percent.
The cryptocurrency reclaimed its spot among the top five by market capitalization and is currently trading at $0.82, marking a 75 percent increase within the last 24 hours. The recent ruling holds the potential to be a game changer for the broader crypto industry in the United States.
The sector has recently faced a turbulent regulatory environment, punctuated by near-daily news of enforcement action by the SEC against key players in the crypto world. The tension peaked when the SEC pursued cases against giants Binance and Coinbase, asserting that multiple cryptocurrencies listed on their platforms fell within the realm of securities.
Despite Ripple having faced criticism within the crypto community in the past, the court's decision has sparked widespread celebration. The verdict could very well establish a precedent for future legal battles involving regulators and cryptocurrency companies.
As some industry observers noted, if XRP is not considered a security, it stands to reason that no cryptocurrency should fall under that classification.
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