Ripple Secures Victory Against the SEC in Court
- The SEC’s legal battle with Ripple spanned over two years. The US regulator sued Ripple and two senior executives, Brad Garlinghouse and Chris Larsen, in December 2020 over claims the business was marketing unregistered securities.
- Gemini and Kraken have announced plans to relist XRP.
- The XRP price surged by over 20% following Thursday’s ruling.
Ripple’s XRP token made a much-awaited return to several exchanges after the crypto payment company secured a huge win in court against the United States Securities and Exchange Commission (SEC).
The District Court of the Southern District of New York ruled on Thursday that XRP could not be classified as a security. The SEC filed a lawsuit against Ripple in 2020, claiming the token was a security and should be regulated.
The legal battle featured a sufficient amount of dramatic moments over the last three years, including the publication of the “Hinman Documents” and persistent pushback from Ripple Labs CEO Brad Garlinghouse against the SEC’s claims. However, most crypto enthusiasts believe Thursday’s ruling sets precedence on what qualifies as securities.
The court ruled that institutional sales of XRP qualify the cryptocurrency as a security, while programmatic sales of the coin do not. This provides a new era of perspective where a cryptocurrency’s sale method as well as its marketing determine whether it counts as a security.
According to the court’s ruling,
There is no evidence that a reasonable Programmatic Buyer, who was generally less sophisticated as an investor, shared similar “understandings and expectations” and could parse through the multiple documents and statements that the SEC highlights, which include statements (sometimes inconsistent) across many social media platforms and news sites from a variety of Ripple speakers (with different levels of authority) over an extended eight-year period.
Garlinghouse shared his excitement in a tweet, claiming the decision was a victory for the industry at large. He wrote,
We said in Dec. 2020 that we were on the right side of the law and would be on the right side of history. Thankful to everyone who helped us get to today’s decision—one that is for all crypto innovation in the U.S. More to come.
The SEC, under Chairman Gary Gensler, claims that most cryptocurrencies qualify as securities, demanding that token issuers register as broker-dealers before listing their tokens. However, the crypto community has strongly fought against these claims and demanded regulatory clarity.
Thursday’s ruling had an immediate effect on XRP, as the token surged by over 20% after news of the court’s ruling emerged. In addition, crypto exchanges Gemini and Kraken announced plans to relist XRP, unleashing new confidence in the token.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
