It’s finally happened! It’s been nearly three years since the SEC took on Ripple and now today, a US court has finally ruled that $XRP sales do not constitute an offer of investment contract.
The ruling is a huge landmark for the crypto market and a massive win for Ripple in its fight to prove that its native XRP token does not satisfy all conditions of the Howey Test – a legal test used in the US to determine whether an asset is a security.
Following the judgement, the Gemini crypto exchange has since tweeted that: “Given today’s ruling that the sale of XRP on exchanges is not a security, @Gemini is exploring the listing of XRP for both spot and derivatives trading.”
At the time of writing, the global crypto market is 5.74% to $1.26trillion, with the price of XRP now standing at $0.8877 – an unbelievable jump of 88% in the past day. With the price rising by the minute, it looks possible that XRP could soon hit the $1 mark. The last time it traded at this mark was over a year ago.
While SEC chair Gary Gensler’s Twitter profile has yet to make any comment on the matter, here’s how the rest of the crypto world is reacting to the news…
Ripple v SEC – how it began
In December 2020, the Securities and Exchange Commission sued Ripple and its founders for raising $1.3billion through the sale of XRP which the regulator deemed as unregistered securities offering. The case sparked a widespread debate on the classification of XRP, with Ripple Labs arguing that the digital asset functions as a currency, similar to Bitcoin and Ether (both of which the SEC had already deemed non-securities at the time).
They also claimed that there was no signed contract and as a result, the XRP failed to meet the criteria of an investment contract. Despite Ripple’s defence, the repercussions were harsh. Various exchanges delisted XRP, while some temporarily halted trading in response to the regulatory pronouncements. This caused a huge blow to the price of XRP, resulting in a 40% drop at the time.
Ripple v SEC – how it finished
However, today’s victory has brought renewed confidence to crypto investors by providing clarity for similar digital assets. It will now pave the way for other coins and tokens to confirm their non-security status.
At the time of writing, the prices of Solana (SOL), Polygon (MATIC) and Cardano (ADA) – other coins deemed unregistered securities by the SEC lawsuits against Binance and Coinbase – are on the rise following today’s court judgement favouring Ripple.
However, it might not be the end of the case. if anything else happen we will relate it in our dedicated thread about the SEC vs Ripple XRP lawsuit.
