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Ripple, the cryptocurrency company, has achieved a significant victory in the legal battle against the US Securities and Exchange Commission (SEC). A US district judge, Analisa Torres, ruled that Ripple did not violate federal securities law by selling its XRP token on public exchanges and through algorithms. This decision has been celebrated as a major win for the cryptocurrency industry.
While the ruling in favor of Ripple is a significant development, it is important to note that the judge’s decision was partial. Judge Torres also concluded that the institutional sale of XRP did violate federal securities law. Nonetheless, the news of the partial victory propelled the price of XRP up by 75% late on Thursday. Ripple CEO Brad Garlinghouse expressed his satisfaction with the ruling, emphasizing that it is not only a triumph for Ripple but also for the broader cryptocurrency industry in the United States.
The impact of the ruling was swift, as major crypto exchange Coinbase announced its intention to reintroduce XRP to its platform. In response, Coinbase’s own share price surged by over 20%. The lawsuit against Ripple, Garlinghouse, and co-founder Christian Larsen was filed by the SEC in 2020, alleging that they had conducted an unregistered securities offering, raising more than $1.3 billion.
Judge Torres determined that the “programmatic” sales of XRP, carried out through exchanges and algorithms, did not constitute offers of securities under the law. This conclusion was based on the finding that buyers did not possess a reasonable expectation of deriving profits from the entrepreneurial or managerial efforts of others.
The ruling in favor of Ripple marks an important milestone in the legal landscape surrounding cryptocurrencies. It underscores the need for further clarity and guidance regarding the regulatory framework for digital assets. As the case progresses, it will continue to shape the legal and regulatory environment for the cryptocurrency industry.
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