- Ripple has achieved a significant victory against the SEC in a landmark ruling.
- The ruling acknowledges that Ripple has breached securities laws in direct sales.
- The legal battle is still far from over.
In its ongoing clash with the United States Securities and Exchange Commission (SEC), Ripple has achieved a partial victory that could potentially reshape the crypto industry. To gain a deeper understanding of the implications of XRP’s win for the future of crypto tokens, I recommend reading my colleague David Marsanic’s article on the matter. However, it’s important to note that the legal saga is far from reaching its conclusion.
No Securities Law Violation in XRP Sales
According to the recent ruling by US District Judge Analisa Torres, Ripple did not violate federal securities law by selling XRP on crypto exchanges. This decision significantly impacted the market, causing a staggering 104% surge in the price of XRP immediately after the announcement.
While this ruling brings some positive news for Ripple, it’s not an unequivocal win. Judge Torres also pointed out that the company did contravene federal securities law when directly selling XRP to sophisticated investors. As a result, Ripple still faces substantial legal obstacles on its path forward.
Judge Torres Sets Precedent with Ruling
The crux of the matter revolves around the question of whether the sale of Ripple’s native XRP token, which has generated billions for the company, constitutes an illegal securities sale. In 2020, the SEC accused Ripple of unlawfully raising $1.3 billion through the sale of XRP, and the lawsuit also named CEO Brad Garlinghouse and co-founder Chris Larsen.
Notably, Judge Torres’s decision stands as the first instance where a US judge has favored a crypto company by ruling that specific XRP sales fall outside the scope of US securities law. The ruling distinguishes between Ripple’s “blind bid” sales, where the company remained unaware of the buyer’s identity, and direct sales made to institutional investors.
Jury Trial to Decide Ripple Executives’ Personal Accountability
According to Torres, the blind bid sales did not violate securities laws, but the direct sales did. A jury trial will address whether Garlinghouse and Larsen can be held personally accountable for the institutional sales violation.
While this landmark ruling in the Ripple lawsuit represents a substantial step in defining the intricate relationship between cryptocurrencies and securities law, the battle between Ripple and the SEC is far from reaching a resolution.
On the Flipside
- The distinction made by Judge Torres between “blind bid” sales and direct sales may create confusion and loopholes in determining the legality of crypto offerings.
- While this ruling may provide temporary relief for Ripple, the ultimate outcome of the case remains uncertain, and the company still faces substantial legal challenges ahead.
Why This Matters
The ruling in Ripple’s clash with the SEC holds immense significance as it sets a precedent for how cryptocurrencies are regulated under securities law. This decision impacts Ripple and XRP and has broader implications for the entire crypto industry, shaping the legal landscape and providing insights into the boundaries between digital assets and securities offerings.
At present, the relisting of XRP on cryptocurrency exchanges remains uncertain. While Ripple achieved a partial victory in its legal battle with the SEC, the outcome of the lawsuit and its impact on XRP’s relisting is yet to be determined. It is advisable to monitor updates from exchanges and regulatory developments for any potential relisting decisions.
The SEC filed a lawsuit against Ripple in 2020, accusing the company of unlawfully raising $1.3 billion through the sale of XRP. The specific date when the SEC initiated legal action against Ripple was not provided in the given information.
Following the announcement of the court ruling in Ripple’s favor, XRP experienced a significant surge in value. The cryptocurrency gained approximately 104% after the decision was made public. However, it’s important to note that cryptocurrency prices are highly volatile, and market conditions can change rapidly.
No, the Ripple lawsuit is not over. While the recent ruling by US District Judge Analisa Torres provided some clarity regarding the violation of securities laws, there are still significant legal hurdles ahead for Ripple. The court determined that Ripple did not violate federal securities law by selling XRP on crypto exchanges but acknowledged that the company contravened these laws when selling directly to sophisticated investors. The lawsuit’s resolution and its full impact on Ripple and the crypto industry are yet to be determined.
To learn more about the recent surge in Ripple’s price following the judge’s ruling that XRP is not a security, read here:
To stay updated on how the SEC’s victory against Ripple has inspired solidarity in the euphoric market, click the link below: