Ripple Labs emerges victorious in legal battle with SEC
Ripple Labs has won its legal fight against the U.S. Securities and Exchange Commission (SEC). The federal district judge ruled that XRP, the native currency of the XRP Ledger, is not an unregistered security, except when used to raise funds from institutions. Judge Torres found that $728 million worth of Ripple’s institutional sales constituted securities sales, but programmatic sales to the public and XRP distributions to Ripple Labs employees were not. The judge used the Howey test to evaluate the case and concluded that there was no reasonable expectation of profits for public sales.
Key points:
– XRP is not considered a security, except when used for fundraising from institutions.
– The Howey test was used to evaluate the case, and the third prong was not satisfied for public sales.
– XRP’s price surged by 52% within two hours of the ruling.
– The ruling may offer a new framework for token classification in future cases.
– The impact of the “Hinman documents” on the judgment is unclear.
Hot Take:
The judge’s ruling in favor of Ripple Labs is a significant victory for the company and the broader crypto industry. It sets a precedent that XRP is not an unregistered security in most cases, providing clarity for token classification. This ruling may also have implications for future enforcement actions by the SEC, potentially shifting the dynamics of how the agency approaches the crypto industry. Only time will tell how this decision will shape the regulatory landscape moving forward.
By
By
By
By
By