Ripple XRP revolutionizes crypto world. In a significant development for the cryptocurrency industry, Ripple Labs recently secured a crucial courtroom victory against the Securities and Exchange Commission (SEC).
Ripple XRP revolutionizes crypto trading
The federal district judge Analisa Torres ruled that XRP, the token that powers Ripple’s payments network, is not necessarily a security, except when sold to institutions to raise funds.
This ruling, according to crypto lawyer John Deaton, is a significant win for Ripple and the crypto industry at large. “An appeal is not even close to a setback,” Deaton said, pushing back against a claim made on Twitter. “Don’t let anyone underestimate how significant this win is.”
Ripple is the victor:a setback for the SEC
Ripple has been embroiled in a legal battle with the SEC since 2020, when the regulator accused Ripple of raising $1.3 billion in unregistered securities offerings. The recent ruling, however, has been seen as a setback for the SEC, despite its plans to appeal the decision.
Deaton, the founder of Crypto Law, argues that even if the SEC appeals, it will take at least two years for a decision to be issued by the 2nd Circuit. Until then, the Torres Decision stands as the law, redefining the future of cryptocurrencies.
Judge Torres ruled that programmatic sales of XRP to public buyers did not fulfill the Howey Test, a methodology used to determine whether an investment contract exists in the sale of an asset. This is because public buyers of XRP were not aware they were purchasing the token from Ripple, preventing any expectation of profit from being tied to Ripple’s efforts.
a revolutionary moment in crypto trading
Deaton further explained that even if the SEC successfully challenges Torres’ application of the Howey Test, Torres could still rule the same way when looking at the Howey Test’s other factors, such as the “investment of money” and the existence of a “common enterprise.”
This would present a greater challenge for the SEC, as it is much harder for the SEC to satisfy that a common enterprise existed under the Howey Test as opposed to an expectation of profit derived from the efforts of others.
In conclusion, the ruling in favor of Ripple’s XRP is a revolutionary moment in crypto trading. It not only signifies a significant win for Ripple but also sets a precedent for other cryptocurrencies facing regulatory scrutiny. This development underscores the need for clear legislation, rather than regulation by enforcement, to guide the future of the crypto industry.
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