Ripple Labs Scores Partial Victory Against SEC

Ripple Labs Scores Partial Victory Against SEC, Propelling Cryptocurrency Prices Higher

Ripple Labs Inc. and the U.S. In a recent legal battle between the Securities and Exchange Commission (SEC), Ripple has emerged with a significant victory, sending the price of the cryptocurrency soaring. Judge Analisa Torres ruled that certain cryptocurrency transactions should not be classified as securities sales, handing Ripple a partial victory. Although the district court’s decision is not binding outside its jurisdiction, it indicates that it is indeed possible to challenge the SEC’s insistence on registering most digital assets as securities.

The ruling’s implications extend to Ripple, potentially affecting the agency’s actions against other crypto exchanges and intermediaries. In December 2020, the SEC took legal action against Ripple, accusing the company of making an unauthorized securities offering by selling nearly $1.3 billion worth of XRP since 2013.

 

Through a summary judgment, the court concluded that the $757.6 million worth of XRP sold by Ripple to retail buyers in programmatic sales fell short of meeting the criteria necessary for an investment contract.. The court also ruled that using XRP as payment for employee wages and services does not qualify as an investment. While institutional buyers reasonably expected Ripple to use capital from the sale to improve the XRP ecosystem and increase its price, programmatic buyers did not share the same expectations.

Unlike the more common pattern of initial coin offerings (ICOs), where creators sell coins to investors, Ripple received 80 billion units of XRP currency (out of a total limit of 100 billion) from its original founding team. The allocation was aimed at supporting the development of Ripple’s blockchain, the XRP ledger. This deviates from the traditional model, although it is worth noting that founding groups or decentralized foundations may retain significant holdings in certain areas.

However, the ruling did not turn out to be a complete crypto victory. The judge concluded that the $728.9 million in XRP sold by Ripple to institutional investors constituted an illegal offering. According to the court’s ruling, it was determined that institutional buyers, positioned as reasonable investors, would acquire XRP in anticipation of profiting from Ripple’s efforts.

In the wake of the announcement of the ruling, the collective value of cryptocurrencies experienced an impressive surge of nearly 6%, rising to a whopping $1.3 trillion. assets, according to CoinGecko. Notably, Coinbase, a prominent cryptocurrency exchange, jumped 20% in its stock price as investors perceived the ruling as a positive development for the company’s ongoing battle with the SEC. It is interesting to note that Coinbase suspended XRP trading in 2020 when the Ripple lawsuit was initially announced.

Despite the positive outcome for Ripple, the ruling does not provide a blanket clearance for other exchanges. Stephen Paley, a partner and co-chair of the Digital Commerce practice at Brown Rudnick, emphasized the importance of considering certain nuances and potential precedents set by this ruling. Paley highlighted that the Court clearly stated in a footnote that it was not ruling on whether secondary transactions should be classified as securities transactions. The court based its reasoning on the fact that crypto exchange users had no way of knowing that Ripple was involved in these transactions, thereby concluding that profits could not be expected based on Ripple’s efforts.

Paley thinks this argument will make it more challenging for future courts to argue that secondary sales are investment contracts. He questioned the inconsistency of treating a transaction between two non-Ripple parties as a securities transaction without Ripple’s involvement, while treating it differently.

While Ripple’s partial victory is significant, the implications of this ruling and its wider impact on cryptocurrency regulation are not yet fully understood. Market participants and crypto enthusiasts will closely monitor further legislative developments to gain clarity on the SEC’s approach to digital assets and the future trajectory of the crypto industry.

Pic Source: Google

XRP Value Day By Day 

Date | Value
——————————
July 14, 2023 | 0.8125
July 13, 2023 | 0.4714
July 12, 2023 | 0.4755
July 11, 2023 | 0.4773
July 10, 2023 | 0.4682
July 09, 2023 | 0.4704
July 08, 2023 | 0.4684
July 07, 2023 | 0.4644
July 06, 2023 | 0.4778
July 05, 2023 | 0.4880
July 04, 2023 | 0.4895
July 03, 2023 | 0.4838
July 02, 2023 | 0.4733
July 01, 2023 | 0.4737
June 30, 2023 | 0.4746
June 29, 2023 | 0.4648
June 28, 2023 | 0.4844
June 27, 2023 | 0.4792
June 26, 2023 | 0.4896
June 25, 2023 | 0.4867
June 24, 2023 | 0.4961
June 23, 2023 | 0.4953
June 22, 2023 | 0.5010
June 21, 2023 | 0.4923
June 20, 2023 | 0.4939
——————————
June 19, 2023 | 0.4887
June 18, 2023 | 0.4809
June 17, 2023 | 0.4774
June 16, 2023 | 0.4819
June 15, 2023 | 0.4820
June 14, 2023 | 0.5222
June 13, 2023 | 0.5273
June 12, 2023 | 0.5235
June 11, 2023 | 0.5108
June 10, 2023 | 0.5387
June 09, 2023 | 0.5252
June 08, 2023 | 0.5209
June 07, 2023 | 0.5317
June 06, 2023 | 0.5123
June 05, 2023 | 0.5376
June 04, 2023 | 0.5200
June 03, 2023 | 0.5259
June 02, 2023 | 0.5085
June 01, 2023 | 0.5193
May 31, 2023 | 0.5223
May 30, 2023 | 0.4938
May 29, 2023 | 0.4835
May 28, 2023 | 0.4722
May 27, 2023 | 0.4698
May 26, 2023 | 0.4541

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