Ripple Labs scored a major victory on July 13 in the United States District Court for the Southern District of New York when Judge Analisa Torres ruled in part in the company’s favor in a case brought by the Securities and Exchange Commission (SEC) that dates back. until 2020.
In a groundbreaking development, Judge Torres granted summary judgment in favor of Ripple Labs, confirming that the XRP token is not a security in relation to programmatic sales on digital asset exchanges. This decision recognizes the distinct utility nature of XRP and its distinction from security.
The SEC secured its own victory, however, as a federal judge ruled that XRP qualifies as a security when sold to institutional investors, which complies with the terms of the Howey test. This subtle decision highlights the need for regulatory compliance in certain cases without jeopardizing the broader utility and legitimacy of XRP.
The SEC lawsuit sought to force Ripple to halt the offering of its XRP token, alleging that it was an unregistered security. This decision clarifies the matter and confirms that Ripple can continue to operate provided that the relevant regulations and compliance measures are followed.
As the news spread, the price of XRP immediately rose from $0.45 to $0.61, reflecting a remarkable increase of over 25% at the time of this announcement. This upward movement shows the market’s positive reaction to the court’s decision and renewed confidence in XRP’s future prospects.
The case against Ripple, launched in December 2020 by the SEC against Ripple and its top executives Brad Garlinghouse and Chris Larsen, has attracted attention due to its complex litigation and Garlinghouse’s continued opposition. During this three-year journey, key moments such as the revelation of the “Hinman Papers” added to the drama surrounding the case.
Buoyed by this favorable decision, the cryptocurrency community is celebrating the outcome with jubilation. The ruling reinforces the notion that innovation and compliance can co-exist in the digital asset space, fostering a positive environment for both investors and blockchain-based businesses.
Ripple Labs’ courtroom victory marks a significant milestone for the company, cementing its position as a pioneer in the blockchain industry while highlighting the importance of legal clarity. This decision is not only a triumph for Ripple, but also a positive development for the broader cryptocurrency ecosystem, fostering a more favorable regulatory environment and opening the door for future growth and innovation.