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Ripple scores partial win in SEC lawsuit

Ripple scores partial win in SEC lawsuit

Ripple did not violate federal securities law by selling the XRP token on public exchanges and through algorithms, a US judge has ruled in a major win for the cryptocurrency industry.

However, Ripple's victory in the case brought by the SEC was only partial, with US district judge Analisa Torres also ruling that institutional sale of XRP did violate federal securities law.

Nevertheless, the news sent XRP's price soaring 75% late on Thursday, with Ripple CEO Brad Garlinghouse telling Reuters that the ruling is a “a huge win for Ripple but more importantly for the industry overall in the US”.

Crypto exchange Coinbase quickly said it will add XRP back to its platform and saw its own share price jump by over 20%.

The SEC filed suit against Ripple, Garlinghouse and co-founder Christian Larsen in 2020, alleging that they "raised over $1.3 billion through an unregistered, ongoing digital asset securities offering".

The judge has ruled that "programmatic" sales - through exchanges and algorithms - were not offers of securities under the law because it could not be said with certainty that buyers had “a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others".

Comments: (1)

Richard Garnier
Richard Garnier - Capital Horizon - Stockholm 14 July, 2023, 15:24Be the first to give this comment the thumbs up 0 likes Well this is broadly good news - certainly for XRP and the many FIs plugged into their ecosystem at and least for retail investors. It’s also a sentiment relief for the crypto loyal. But does it not miss a more important point which is how instruments like XRP are collateralised - and indeed if algorithms rather than full reserve assets are the backing model for liquidity? That’s a better use of the SECs time to explore however they want to attempt to classify XRP - it’s not what it is categorised as that matters it’s how it’s backed and how it’s utilised.