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Breaking: Judge Rules XRP Not a Security, Crypto Market Pumps
On Thursday Ripple scored a massive victory in its ongoing battle against the SEC as a Southern District Judge ruled the XRP token is not a security as far as retailer investors are concerned.
It’s been three years since the SEC initiated legal action against Ripple and the case is expected to serve as a precedent for many cryptocurrencies in the future.
After news of the ruling broke, the price of XRP jumped up by nearly 50%. Most of the crypto market turned green with coins like Solana and Polygon recording considerable 15% bumps.
It wasn’t all good news for Ripple as the judge did find that institutional sales of XRP or those used in a fundraiser would be classified as a security. The case could still go to full trial or be appealed.
Judge: XRP Does Not Constitute an Investment Contract
Originally the SEC lawsuit sought to keep Ripple from offering its XRP token under the premise that it was a security and required additional regulation.
It appears that in a broad sense XRP does not constitute a security and could potentially be re-listed by major exchanges in short order.
“XRP, as a digital token, is not in and of itself a ‘contract, transaction, or scheme’ that embodies the Howey requirements of an investment contract.”
Interestingly the judge surmised that programmatic sale of XRP on crypto exchanges does not meet the third prong of the Howey test so any sales by exchanges would not be viewed as securities. This may have potential ramifications for other crypto organizations if they are ever brought to court.
Solana, Cardano Get Huge Boost
The case is considered a huge victory for crypto in general as the SEC has long sought control over the market, arguing that many tokens are securities.
Recently the SEC sued Binance and Coinbase exchanges and alleged that a variety of popular coins including Solana (SOL), Cardano (ADA), Polygon (MATIC) were securities.
That logic appears flawed as the general view is that many of those tokens are even more decentralized than XRP. Therefore it would be even more difficult for the SEC to win in court against any of the aforementioned projects.
Bitcoin and Ether – the two major coins not named a security in the SEC documents – also recorded bumps today, although considerably smaller than coins like ADA or SOL.
The crypto market as a whole was up by nearly 4% at the time of publication.
