What XRP’s Big SEC Win Means for the Future of Crypto Tokens

Dive into the details of Ripple’s legal triumph over the SEC, and its ripple effect on the crypto world.

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  • Ripple’s victory against the SEC sets a precedent for the crypto industry.
  • The court ruling has significant implications for other cryptocurrencies.
  • The case outcome could reshape the SEC’s approach to regulating crypto tokens.

In a landmark case that has sent ripples through the crypto world, Ripple Labs, the company behind the XRP token, won against the U.S. Securities and Exchange Commission (SEC). 

This victory not only marks a significant milestone for Ripple but also sets a precedent that could shape the future of the crypto industry. 

Ripple’s Victory and Its Implications

On Thursday, July 13, Ripple Labs scored a partial victory in its legal battle with the SEC. The court ruled that Ripple did not violate federal securities law by selling its XRP token on public exchanges. This decision, seen as a significant blow to the SEC’s crypto crackdown, has far-reaching implications for the crypto industry. 

Following the ruling, Brad Garlinghouse, the CEO of Ripple, celebrated. He highlighted that the court found that XRP is not a “contract, transaction[,] or scheme” that embodies the Howey requirements of an investment contract.” 

“This is now a matter of law (not up for trial),” Garlinghouse added. The SEC can no longer actively pursue other tokens based solely on the Howey Test, which they had been adamant about using until now. 

Stuart Alderoty, a key figure at Ripple, also took to Twitter to explain his views of what it means. “A huge win today – as a matter of law – XRP is not a security,” he exclaimed. 

“The only thing the Court found constitutes an investment contract is past direct XRP sales to institutional clients,” Alderoty explained. He also hoped for “a rational conversation about crypto regulation” in the US. 

The ruling is relevant not only for Ripple but also for most other crypto projects. Tokens that faced potential delisting on major exchanges, including ADA, MATIC, and SOL, have seen their prospects improve. However, crypto tokens are still not completely in the clear. 

On the Flipside

  • While Ripple celebrated, the court’s decision validated a part of the SEC’s argument. Namely, it did affirm that Ripple’s $728.9 million initial token sale to accredited investors was an unregistered securities offering. 
  • The SEC highlighted its partial victory in its response to the ruling. This indicates that the SEC will examine all initial coin offerings (ICO). 

Why This Matters

For crypto traders, this ruling is significant as it provides some clarity on how cryptocurrencies might be regulated in the future.

Read more about Ripple court win against the SEC: 

Breaking: Ripple’s XRP Wins Case Against SEC. Not a Security.

Read more about the latest development for Solana: 

Solana Ecosystem Expands: Helius Launches New Tool for Developers

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.