A year after Ripple’s amazing victory
A year ago, a landmark ruling in the Securities and Exchange Commission (SEC) case against Ripple Labs ruled that XRP, Ripple's cryptocurrency, is not a security guarantee. This decision had implications for the cryptocurrency market and regulatory landscape in the United States.
The decision marks a major victory for Ripple, the blockchain-based digital payment network, and sets a critical precedent for the adoption of cryptocurrencies. The SEC first filed charges against Ripple in December 2020, alleging that the company made an unregistered securities offering by selling XRP.
However, Ripple argued that XRP should be considered a currency rather than a security, and after a long legal battle, on July 13, 2023, the court sided with Ripple.
Implications for the Cryptocurrency Market
The court ruling that XRP is not a security has had many consequences for the cryptocurrency industry. First, it provides the level of regulatory clarity needed. Cryptocurrencies have often operated in a gray area, with regulatory agencies struggling to properly classify and regulate them.
By ruling that XRP is not a security, the court has set a precedent that could affect how other cryptocurrencies are viewed and regulated. This decision also had a positive impact on the market price of XRP. According to TradingView data, the price of XRP rose 6% after the decision.
Ripple's Chief Legal Officer Stuart Alderotti shared his thoughts on the X Forum, highlighting the importance of Judge Torres' ruling. This decision paved the way for other cases, including the recent Binance case under the leadership of Chairman Gensler, to recognize the SEC's overreach and departure from legal principles.
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Although the courts provide a necessary check on the actions of the SEC, Alderoty emphasized that relying on lengthy litigation to determine the status of each token on a case-by-case basis is an unsatisfactory solution.
Regulatory developments and Ripple's progress
Last year, the case continued to grow, Ripple and the SEC were involved in more legal battles and negotiations. The SEC hasn't fully backed off, and the regulatory environment is complex and challenging. However, Ripple used this time to strengthen legal arguments and strengthen its position in the market.
The case has seen several developments and legal battles over the years. One notable aspect is the discussion surrounding the Howey test, which determines whether a transaction qualifies as an “investment contract” under US law. According to the SEC, XRP meets the conditions of the Hawaii test, while Ripple argues the opposite.
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