The US District Court for the Southern District of New York issued a landmark ruling regarding the cryptocurrency industry yesterday (Thursday). After a lengthy legal battle, Judge Annalisa Torres has ruled partially in favor of Ripple Labs, saying that XRP is not a security when it is sold to retail investors.
The ruling brought joy to the cryptocurrency industry as regulators put pressure on several major cryptocurrency brands. The Securities and Exchange Commission (SEC), which alleged that XRP was an unregistered security, also took Coinbase, Binance, and several other crypto companies to court.
“This is very new technology and we are talking about laws that, in some cases, are almost a hundred years old and pre-internet history.”
was able to discuss
Ripple winning the SEC bag and what that means # encrypt today @employee. pic.twitter.com/wlyXj8q9YE– brock pierce (@brockpierce) July 13, 2023
After the preliminary ruling on Thursday, demand for XRP tokens has skyrocketed. The market price of XRP is up about 65 percent since then, compared to increases of only 2.3 percent and 6.4 percent for Bitcoin and Ethereum, respectively, in the past 24 hours, according to Coinmarketcap.
However, XRP is not the only cryptocurrency that is gaining that quickly. Cardano’s ADA and Solana’s, which the SEC also described as an unregistered security in separate lawsuits against the exchanges, both jumped about 20 percent and 28 percent, respectively.
The sudden surge in the price of XRP has made it the fourth largest cryptocurrency, with a market cap of over $40.6 billion, behind only Bitcoin, Ethereum, and Tether.
“Ripple’s victory over the SEC is a huge victory for the digital currency industry that will shape the future of crypto regulation,” said Alex Adelman, Co-Founder and CEO of Lolli.
“The landmark ruling creates a strong legal precedent that digital tokens sold on exchanges are not themselves securities. The ruling is also the biggest challenge to the SEC’s authority over cryptocurrencies to date and could narrow the agency’s ability to regulate the industry.”
The most important part of this ruling:
“XRP, as a digital token, is not in and of itself a ‘contract, (or) transaction, or scheme’ that embodies Howey’s requirements for an investment contract.”
This is a legal matter now (not for trial).
– Brad Garlinghouse (@bgarlinghouse) July 13, 2023
Reconnect beginnings
A lawsuit filed by the Securities and Exchange Commission (SEC) against Ripple in December 2020 forced several cryptocurrency exchanges in the United States to delete the token to avoid any regulatory backlash for the alleged listing of unregistered securities. Now, after Thursday’s ruling, a host of cryptocurrency exchanges are ready to offer XRP again.
Coinbase and Gemini have confirmed that they will bring back XRP on their trading platforms. Kraken has gone a step further and has already enabled XRP trading for its US users by the end of the day.
“The ruling on Ripple highlights the detrimental impact of the regulation-by-enforcement approach, underlining its negative consequences for the entire industry,” said Rusan Boykin, General Council of Hashflow. “This strategy generates uncertainty, as regulators lack clear guidelines to adhere to, which hinders market innovation. To foster an environment conducive to growth, Congress must step in and provide guidance similar to European MICA rules.”
“It is necessary to move away from the regressive enforcement model and embrace proactive regulation that promotes industry development while protecting the interests of investors and consumers.”
The SEC’s loss in the Ripple case should put pressure on Congress to fill the regulatory void. @employee@employee@employee@employee@employee Let’s do it!!!!
– Mike Novogratz (@novogratz) July 13, 2023
Accurate judgment
Although the cryptocurrency industry is celebrating the victory of Ripple, it was only partial. The court stated that selling XRP to sophisticated investors and hedge funds violated US federal securities law. In these cases, XRP can be classified as a security.
“The court found that Ripple violated securities laws, specifically in relation to direct sales to institutional investors,” said Townsend Lansing, Head of CoinShares Product.
“As such, XRP is not just a security, but questions have arisen regarding the legality of its offering. With regard to these sales, the court confirmed that the law was indeed violated, marking a major victory for the SEC and a precedent for its legal action against other cryptocurrencies.”
Coinbase benefits
Coincidentally, Coinbase faced the SEC in court on Thursday, in its first hearing. The stock exchange faces several allegations, including the listing of unregistered securities. Although Coinbase’s appearance in court did not result in much development, the Ripple ruling brought surprising excitement among Coinbase shareholders.
Before the markets closed on Thursday, publicly listed Coinbase shares jumped more than 24 percent, pushing the price to $107.
“The increase was largely motivated by investors who interpreted Judge Torres’ decision as representing a repudiation of the SEC’s argument in the lawsuit it filed against COIN on June 6 that many tokens were bought and sold in secondary market transactions on the company,” the analysts said. Led by Mark Palmer at Berenberg Capital Markets, a company that has set a Coinbase stock price target at $37, the exchange is an unregistered security.
“(The ruling) relates only to primary market transactions through which Ripple sold XRP, while COIN facilitates secondary market transactions on the exchange.”
The US District Court for the Southern District of New York issued a landmark ruling regarding the cryptocurrency industry yesterday (Thursday). After a lengthy legal battle, Judge Annalisa Torres has ruled partially in favor of Ripple Labs, saying that XRP is not a security when it is sold to retail investors.
The ruling brought joy to the cryptocurrency industry as regulators put pressure on several major cryptocurrency brands. The Securities and Exchange Commission (SEC), which alleged that XRP was an unregistered security, also took Coinbase, Binance, and several other crypto companies to court.
“This is very new technology and we are talking about laws that, in some cases, are almost a hundred years old and pre-internet history.”
was able to discuss
Ripple winning the SEC bag and what that means # encrypt today @employee. pic.twitter.com/wlyXj8q9YE– brock pierce (@brockpierce) July 13, 2023
After the preliminary ruling on Thursday, demand for XRP tokens has skyrocketed. The market price of XRP is up about 65 percent since then, compared to increases of only 2.3 percent and 6.4 percent for Bitcoin and Ethereum, respectively, in the past 24 hours, according to Coinmarketcap.
However, XRP is not the only cryptocurrency that is gaining that quickly. Cardano’s ADA and Solana’s, which the SEC also described as an unregistered security in separate lawsuits against the exchanges, both jumped about 20 percent and 28 percent, respectively.
The sudden surge in the price of XRP has made it the fourth largest cryptocurrency, with a market cap of over $40.6 billion, behind only Bitcoin, Ethereum, and Tether.
“Ripple’s victory over the SEC is a huge victory for the digital currency industry that will shape the future of crypto regulation,” said Alex Adelman, Co-Founder and CEO of Lolli.
“The landmark ruling creates a strong legal precedent that digital tokens sold on exchanges are not themselves securities. The ruling is also the biggest challenge to the SEC’s authority over cryptocurrencies to date and could narrow the agency’s ability to regulate the industry.”
The most important part of this ruling:
“XRP, as a digital token, is not in and of itself a ‘contract, (or) transaction, or scheme’ that embodies Howey’s requirements for an investment contract.”
This is a legal matter now (not for trial).
– Brad Garlinghouse (@bgarlinghouse) July 13, 2023
Reconnect beginnings
A lawsuit filed by the Securities and Exchange Commission (SEC) against Ripple in December 2020 forced several cryptocurrency exchanges in the United States to delete the token to avoid any regulatory backlash for the alleged listing of unregistered securities. Now, after Thursday’s ruling, a host of cryptocurrency exchanges are ready to offer XRP again.
Coinbase and Gemini have confirmed that they will bring back XRP on their trading platforms. Kraken has gone a step further and has already enabled XRP trading for its US users by the end of the day.
“The ruling on Ripple highlights the detrimental impact of the regulation-by-enforcement approach, underlining its negative consequences for the entire industry,” said Rusan Boykin, General Council of Hashflow. “This strategy generates uncertainty, as regulators lack clear guidelines to adhere to, which hinders market innovation. To foster an environment conducive to growth, Congress must step in and provide guidance similar to European MICA rules.”
“It is necessary to move away from the regressive enforcement model and embrace proactive regulation that promotes industry development while protecting the interests of investors and consumers.”
The SEC’s loss in the Ripple case should put pressure on Congress to fill the regulatory void. @employee@employee@employee@employee@employee Let’s do it!!!!
– Mike Novogratz (@novogratz) July 13, 2023
Accurate judgment
Although the cryptocurrency industry is celebrating the victory of Ripple, it was only partial. The court stated that selling XRP to sophisticated investors and hedge funds violated US federal securities law. In these cases, XRP can be classified as a security.
“The court found that Ripple violated securities laws, specifically in relation to direct sales to institutional investors,” said Townsend Lansing, Head of CoinShares Product.
“As such, XRP is not just a security, but questions have arisen regarding the legality of its offering. With regard to these sales, the court confirmed that the law was indeed violated, marking a major victory for the SEC and a precedent for its legal action against other cryptocurrencies.”
Coinbase benefits
Coincidentally, Coinbase faced the SEC in court on Thursday, in its first hearing. The stock exchange faces several allegations, including the listing of unregistered securities. Although Coinbase’s appearance in court did not result in much development, the Ripple ruling brought surprising excitement among Coinbase shareholders.
Before the markets closed on Thursday, publicly listed Coinbase shares jumped more than 24 percent, pushing the price to $107.
“The increase was largely motivated by investors who interpreted Judge Torres’ ruling as representing a repudiation of the SEC’s argument in the lawsuit it filed against COIN on June 6 that many tokens were bought and sold in secondary market transactions on the company,” the analysts said. Mark Palmer at Berenberg Capital Markets, a company that has set a Coinbase stock price target at $37, says the exchange is an unregistered security.
“(The ruling) relates only to primary market transactions through which Ripple sold XRP, while COIN facilitates secondary market transactions on the exchange.”
