In a groundbreaking verdict, a federal judge has ruled in favor of Ripple Labs in its legal dispute with the Securities and Exchange Commission (SEC). The judge’s decision states that XRP, the digital currency native to the Ripple blockchain, does not qualify as a security. This triumph represents a significant milestone for both the company and the wider cryptocurrency industry.
Ripple Scores Major Victory in SEC Lawsuit
The SEC had accused Ripple of selling XRP as an unregistered security, but the judge concluded that the token does not meet the criteria for classification as a security under the Howey test. This legal assessment serves as a yardstick to determine if an investment can be classified as a security.
This ruling poses a formidable setback for the SEC, which has been actively pursuing legal actions against cryptocurrency enterprises in recent times. The SEC’s contention is that numerous cryptocurrencies should be considered securities, leading to enforcement measures against various entities, such as BitConnect and Telegram.
The implications of the Ripple ruling could greatly influence the landscape of cryptocurrency regulation in the United States. Should other courts follow suit, the SEC might encounter heightened obstacles when initiating enforcement actions against cryptocurrency companies.
XRP Soars After Ruling
Furthermore, the ruling triggered a substantial surge in the value of XRP. In the aftermath of this news, the token experienced a remarkable increase of over 45%. Currently, XRP holds the position of the sixth-largest cryptocurrency based on market capitalization.
Ripple’s CEO, Brad Garlinghouse, celebrated the verdict as a “triumph for innovation within the entire US crypto industry.” He expressed gratitude to all those who contributed to the favorable outcome, stating, “We extend our sincere appreciation to all those who have supported us throughout this process.”
As of now, the SEC has not released an official statement regarding the ruling. However, it is highly probable that the agency will file an appeal against the decision.
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