In a landmark legal victory, Ripple Labs was declared to not have violated any US securities laws by listing their tokens on exchanges.
The victory represents the first time a crypto company or project has ever won a case that was brought by the SEC.
Big Picture:
Investors have been closely watching to see the outcome of this case, as it sets a large scale precedent for how crypto can and will be regulated in the United States. The notion that listing a token on crypto exchanges was a violation of securities law represented an existential threat to crypto as an asset class.
The Fine Print:
However, it wasn’t all a complete victory for Ripple. The courts did rule that Ripple selling tokens in private sales to venture and hedge funds was in fact in violation of securities law, giving a partial win to the SEC action. But, secondary sales on public exchanges were deemed not to be a violation.
What People Are Saying:
Naturally, the crypto community and larger ecosystem is ecstatic by the news, which sent XRP rocketing up 75%.
- "The sale of XRP on exchanges is NOT a security. Which means the sales of all cryptos on exchanges are NOT securities and the SEC and Gary Gensler have NO jurisdiction over them. This is a watershed moment that relegates the SEC to TradFi and makes it a dinosaur regulator” - Cameron Winklevoss, founder of Gemini
- "The most important part of this ruling: 'XRP, as a digital token, is not in and of itself a 'contract, transaction, or scheme' that embodies the Howey requirements of an investment contract. This is a now a matter of law (not up for trial.)” - Brad Garlinghouse, founder of Ripple
Cause And Effect:
The news spread quickly and caused a number of positive reactions from crypto participants, all urging that XRP be viewed in a new light following legal clarity.
- Coinbase said it's time to re-list XRP on their exchange
- Gemini said they are exploring re-listing XRP
- Kraken will re list XRP
