Major Victory for Ripple Labs Over SEC Case In XRP Cryptocurrency

In a groundbreaking legal case for the cryptocurrency industry, U.S. District Judge Analisa Torres ruled on Thursday that Ripple Labs Inc did not violate federal securities law by selling its XRP token on public exchanges. This significant legal victory sent the value of XRP skyrocketing, with the token registering a whopping 75% increase by late afternoon on Thursday, as per Refinitiv Eikon data.

A Glimmer of Hope for the Crypto Industry

Judge Torres' ruling in favor of Ripple, the first win for a cryptocurrency company in a case brought by the U.S. Securities and Exchange Commission (SEC), is seen as a beacon of hope for other crypto firms currently embroiled in legal battles with the regulator over jurisdictional issues. It's worth noting, however, that the ruling is specific to the circumstances surrounding Ripple's case.

In a concurrent decision, Judge Torres granted the SEC a partial victory. The judge concluded that Ripple had indeed violated federal securities law by selling XRP directly to sophisticated investors, a ruling that the SEC welcomed. This dual judgment has the potential to be appealed once a final judgment is issued or if permitted by the judge in advance.

The SEC is currently reviewing the decision, as stated by an SEC spokesperson.

Ripple's Major Win

In a statement to the press, Ripple CEO Brad Garlinghouse hailed the decision as “a huge win for Ripple but more importantly for the industry overall in the U.S.”

In light of the judgment, Coinbase, the largest U.S. crypto exchange, announced it would re-allow XRP trading on its platform. Paul Grewal, Coinbase's chief legal officer, took to Twitter to express the company's approval of Judge Torres' decision and announce their move to relist XRP. Subsequently, Coinbase stock experienced a significant surge, closing 24% up at $107 per share on Thursday.

Related news:

Ripple XRP is Back on Coinbase, Gemini, and Kraken

Ripple XRP reignites excitement as it gets relisted on major US cryptocurrency exchanges Coinbase, Kraken, and Gemini. This significant development follows a court ruling that does not necessarily classify XRP as a security, sparking renewed optimism among cryptocurrency enthusiasts. Stay informed on the evolving dynamics of Ripple's legal battles and the future of XRP trading.

News 2023-07-14

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Understanding the Case: When Crypto is Not a Security

This case has been in the public eye given the profound implications it carries for the cryptocurrency industry, which has been disputing the SEC's assertion that most crypto tokens are securities and thus subject to its rigorous investor protection rules.

The SEC had accused Ripple and its executives of conducting an unregistered securities offering worth $1.3 billion by selling XRP, which was created by Ripple's founders in 2012.

The key point of contention lies in whether crypto assets qualify as securities. Assets that are classified as securities require detailed disclosures to inform investors of potential risks, must be registered with the SEC by their issuer, and are subject to strict regulations.

Judge Torres ruled in Ripple's favor, stating that Ripple's XRP sales on public exchanges could not be considered offers of securities under the law. She added that these sales were “blind bid/ask transactions,” and the buyers “could not have known if their payments of money went to Ripple or any other seller of XRP.”

SEC's Partial Victory

Despite Ripple's significant victory, the SEC did secure a partial win. Judge Torres found Ripple's $728.9 million XRP sales to hedge funds and other sophisticated buyers to be unregistered sales of securities. She asserted that Ripple's marketing efforts aimed at these institutional investors made clear the company was pitching a speculative value proposition for XRP.

Judge Torres further ruled that a jury must decide whether Ripple's executives, Garlinghouse, and co-founder and former CEO Chris Larsen, had aided the company's violation of law. She also stated that the defendants cannot argue at trial that they lacked “fair notice” that XRP was a cryptocurrency.

“The law does not require the SEC to warn all potential violators on an individual or industry level,” she added.

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