Ripple Labs achieved a partial win over the Securities and Exchange Commission (SEC) in court proceedings over the legal status of the token XRP.
It became known that the U.S. District Court for the Southern District of New York took the side of Ripple Labs in a dispute with the SEC. Thus, Judge Analisa Torres ruled that XRP isn’t a security. But the victory turned out to be partial, as the decision only concerns sales of XRP to retail investors, while when sold to institutional investors, the asset still falls under the terms of the Howey Test and can be considered a security.
The decision was granted on summary judgment. Even despite the ambiguity of the ruling, the cryptocurrency community is celebrating the victory, as the regulator originally intended to completely restrict Ripple’s ability to use XRP to fund its activities. However, the SEC still has the opportunity to appeal the decision in superior courts. In addition, the regulator accused Ripple Labs that the company earned more than $700 million by selling XRP specifically to institutional investors. That accusation was dismissed, but it too could be appealed in the appeals court.
Meanwhile, the price of XRP on exchanges skyrocketed by 25% within an hour after the first news of the court ruling emerged, with its value rising over 100% at peak times. As of 11:00 a.m. (GMT+3), July 14, the daily increase is 65%, and the token ranked fourth in capitalization among all cryptocurrencies. Besides, crypto exchanges Kraken and iTrustCapital have already restored XRP trading, Coinbase announced the resumption of asset trading in the near future, and Gemini and other major platforms are likely to follow soon.
Furthermore, many experts and opinion leaders suggested that the current court ruling could become an important precedent and have a significant impact on the outcome of the SEC’s court cases against Coinbase and Binance, as well as on the regulator’s ability to exercise control over the cryptocurrency industry in general. The SEC’s litigation against Ripple Labs has been ongoing since late 2020.
