Ripple Registers Big Win In The SEC Lawsuit, XRP Price Shoots Over 60%
In a milestone development on Thursday, July 13, ripple Labs registered a major victory in its long-fought lawsuit against the U.S. Securities and Exchange Commission (SEC).
The United States District Court in the Southern District of New York announced that Ripple’s sales and distribution of XRP doesn’t constitute as an offer and sale of investment contracts. This judgment holds true for the programmatic sales of XRP on crypto exchanges.
This announcement was enough to push XRP into a parabolic rally with the price of Ripple’s native cryptocurrency XRP shooting 60% in a single day. As of press time, XRP is trading at $0.78 with its market cap shooting all the way to $46 billion hitting its 2023 high. With today’s price surge, XRP has become the fourth-largest cryptocurrency by market cap toppling giants like Binance Coin (BNB).
Judge Torress added that Ripple’s XRP is not itself a security, however, they would still need to discuss the transactions and schemes around its trading. The Judge noted: "XRP, as a digital token, is not in and of itself a contract, transaction, or scheme that embodies the Howey requirements of an investment contract. Rather, the Court examines the totality of circumstances surrounding Defendants’ different transactions and schemes involving the sale and distribution of XRP”.
The Judge further added that although the programmatic sales of XRP doesn’t constitute a security, the institutional sales of XRP constitute as unregistered offerings as well as the sale of investment contracts in violation of Section 5 of the Securities Act.
The SEC is currently reviewing the decision and considering whether to appeal it. The decision does not completely clear Ripple or its top executives from potential civil repercussions. Judge Analisa Torres of the Southern District of New York has ordered a jury trial to determine whether Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen should be held accountable for allegedly selling XRP as illegal securities to institutional investors who purchased a significant amount of the cryptocurrency.
However, soon after the ruling by the New York district court, top crypto exchanges like Coinbase announced the re-listing of XRP on its platform which resulted into a strong surge in the trading volumes. The crypto exchange announced: “Coinbase will re-enable trading for XRP (XRP) on the XRP network. Do not send this asset over other networks or your funds may be lost. Transfers for this asset remain available on @Coinbase & @CoinbaseExch in the regions where trading is supported”.
Pro-crypto lawmakers have also commented on yesterday’s development with US House Majority Whip Tom Emmer noting: “The Ripple case is a monumental development in establishing that a token is separate and distinct from an investment contract it may or may not be part of. Let’s make it law”.