Landmark Decision in SEC vs. Ripple Labs Case

The SEC vs Ripple Labs: Key Takeaways from the Landmark Verdict

In a historic ruling, Judge Analisa Torres of the U.S. District Court for the Southern District of New York delivered her verdict in the SEC vs Ripple Labs case on July 13, 2023. The case, which began in December 2020, saw the SEC accuse Ripple Labs and its senior executives of unlawfully offering and selling securities.

Judge Torres agreed with the SEC on matters related to Ripple’s Institutional Sales but dismissed other claims.
She highlighted that XRP sales by Larsen and Garlinghouse were conducted anonymously on digital asset exchanges, which didn’t meet the criteria of the Howey test.
Judge Torres clarified that the XRP token doesn’t inherently qualify as an investment contract under the Howey test.
She noted that secondary market sales of XRP were not offers or sales of investment contracts.
Coinbase promptly announced the re-enabling of XRP trading on its platform after the ruling.

Following the ruling, Coinbase announced the re-enabling of XRP trading on its platform. Gemini also expressed interest in listing XRP for spot and derivatives trading. By August 10, Gemini officially added support for XRP, marking its first-time listing of the cryptocurrency.

Despite the ruling, the possibility of an XRP ETF remains uncertain. James Seyffart, an ETF research analyst at Bloomberg Intelligence, expressed doubt about the viability of an XRP ETF given the current SEC’s stance and the lack of interest from issuers.

Hot Take: The SEC vs Ripple Labs verdict has significant implications for the crypto industry, with the ruling providing clarity on the classification of XRP and leading to increased support and listing of the cryptocurrency on major platforms.