Ripple’s XRP Token Not Considered a Security by U.S. District Court, Says Bernstein Report
The U.S. district court ruling that Ripple’s XRP token should not be considered a security if sold via an exchange or through programmatic sales is a landmark judgment for the crypto industry, according to a research report by broker Bernstein. The ruling removes the overhang on XRP and provides relief for token holders who bought it through exchanges. It also highlights the need for a separate digital assets framework, as the court’s interpretation shows that the “Howey test” cannot be directly applied to tokens on exchange platforms. This decision weakens the SEC’s stance that the securities law is clear and no separate clarity is required for digital assets.
Key Points:
- XRP token is not considered a security if sold through exchanges or programmatic sales
- Institutional sales of XRP were ruled as violating securities law
- Ruling removes securities overhang on tokens sold on exchanges
- Contextual interpretation of transactions is needed for tokens on exchange platforms
- This weakens the SEC’s stance that digital assets do not require separate clarity
Hot Take:
This landmark judgment regarding Ripple’s XRP token is a significant development for the crypto industry. It not only provides relief for token holders but also highlights the need for a separate regulatory framework for digital assets. The court’s decision weakens the SEC’s position and may encourage institutional investors to reconsider digital assets as an investment class.
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