XRP Price Explodes 16% as Judge Rules In Favor of Ripple in SEC Case | Ripple • Cryptocurrency • U.S. Securities and Exchange Commission

Source: TradingView

 

XRP, the native cryptocurrency of the Ripple network, has surged by 16% in the past 24 hours, reaching a new monthly high of $1.23. The price rally comes after a federal judge ruled in favor of Ripple in a long-running lawsuit with the US Securities and Exchange Commission (SEC).

What is the lawsuit about?

The lawsuit dates back to December 2020, when the SEC filed a complaint against Ripple and its executives, alleging that they had raised over $1.3 billion through an unregistered and ongoing securities offering of XRP. The SEC claimed that XRP is a security, not a cryptocurrency and that Ripple had violated federal securities laws by selling XRP to investors without registering or obtaining an exemption.

Ripple, on the other hand, argued that XRP is a digital asset that facilitates cross-border payments and that it had never conducted an ICO (initial coin offering) or offered XRP as an investment contract. Ripple also claimed that the SEC had failed to provide fair notice and due process to the market participants and that the lawsuit was harming millions of innocent XRP holders.

What did the judge rule?

On July 13, 2023, Judge Analisa Torres of the US District Court for the Southern District of New York issued a partial summary judgment in favor of Ripple, dismissing some of the SEC’s claims and granting some of Ripple’s motions. The judge ruled that:

• XRP is not a security when sold to the general public, but only when sold to institutional investors.
• Ripple did not violate Section 5 of the Securities Act of 1933 by selling XRP to retail investors without registration or exemption.
• The SEC did not provide fair notice to Ripple or the market that XRP could be considered a security under the Howey test.
• The SEC’s request for injunctive relief and disgorgement of profits is denied.

The judge also ruled that:

• XRP is a security when sold to institutional investors who expect profits from Ripple’s efforts.
• Ripple violated Section 5 of the Securities Act of 1933 by selling XRP to institutional investors without registration or exemption.
• The SEC’s request for civil penalties against Ripple and its executives is granted.

The judge ordered both parties to submit a proposed judgment within 14 days.

What does this mean for XRP?

The ruling is a major victory for Ripple and the XRP community, as it clears the legal uncertainty and regulatory hurdles that have plagued XRP for years. It also opens the door for more adoption and innovation in the Ripple ecosystem, as well as potential relisting of XRP on major crypto exchanges that had delisted or suspended it due to the lawsuit.

However, the ruling also means that Ripple will have to pay a hefty fine to the SEC and comply with certain restrictions on its future sales of XRP to institutional investors. Moreover, the ruling does not affect other jurisdictions where XRP may still face legal challenges or regulatory scrutiny.

What are the experts saying?

The crypto industry and analysts have reacted positively to the ruling, praising it as a landmark decision that sets a precedent for other crypto cases and projects. Some of the comments include:

• Alex Mashinsky, CEO of Celsius Network: “This is a huge win for Ripple and the entire crypto community. It shows that the SEC cannot arbitrarily apply outdated laws to new technologies and stifle innovation. It also validates XRP as a legitimate cryptocurrency that has real utility and value.”
• Sharat Chandra, VP- Research and Strategy, EarthID: “The ongoing investigation from US SEC is concluding soon and the wind is blowing favorably for Ripple. XRP price rise can be attributed to the news reports signaling the closure of a long impending lawsuit, initiated in December 2020, between Ripple and US Securities and Exchange Commission1.”
• John E. Deaton, founder of CryptoLaw: “Judge Torres has delivered a balanced and fair ruling that protects both retail investors and innovation in the crypto space. She has recognized that XRP is not a security per se, but rather depends on the context and circumstances of each sale. She has also acknowledged that the SEC has overstepped its authority and failed to provide clarity to the market.”

Sources:

1: Ripple Effect: XRP zooms 25% as concerns over legal conundrum ease - The Economic Times 2: XRP Price Explodes 16% as Judge Rules In Favor of Ripple in SEC Case | Headlines | News | CoinMarketCap 3: Breaking: Ripple price explodes 30% as court rules XRP is not a security, partial win for SEC - FXStreet 4: XRP Jumps 44% in a Week After Ripple Moves to Dismiss SEC Lawsuit - Decrypt 5: Ripple Price Prediction 2021 - Will the XRP Price Explode After the SEC Lawsuit? - Crypto Academy