Minutes after the news spread, the price of XRP skyrocketed.
Following reports of a judge ruling in favor of Ripple in its case with the United States Securities and Exchange Commission (SEC), the price of Ripple’s XRP surged instantly.
- According to the report, a judge determined that the sale of XRP by Ripple did not constitute an investment contract.
- This appears to be a significant victory for the company in a legal battle that has lasted over three years.
- According to EgeMoney‘s data, immediately after the news spread, the price of XRP increased by approximately 15% and subsequently rose by over 70% in the following hours.
- This move signifies a major legal triumph for Ripple and deals a significant blow to the U.S. SEC, which failed to prove that XRP sales constituted an investment contract.
- XRP investors have responded extremely positively to the rapid surge in the cryptocurrency since the news broke.
- It has now entered the top 5 cryptocurrencies in terms of total market capitalization and continues its upward trend.
SEC vs. Ripple Case
The SEC vs. Ripple case was an ongoing lawsuit in the United States Southern District of New York that could determine the future regulations of cryptocurrencies and whether they are classified as securities or commodities.
In 2020, the United States Securities and Exchange Commission (SEC) alleged that Ripple, the blockchain developer and creator of the XRP cryptocurrency token, raised over $1.3 billion by selling XRP to investors through an unregistered securities offering in 2013. Ripple relied on previous comments made by an SEC official to support their argument that XRP should not be considered a security.
On July 13, 2023, the court found that when XRP (and therefore the cryptocurrency) was sold to the public, it was not a security, but it was an unregistered securities offering when sold to institutional investors.
Why is the SEC vs. Ripple Case Important?
The SEC vs. Ripple case has had a significant impact on blockchain projects operating with minimal regulatory oversight in the cryptocurrency sector. There were fears about future regulatory actions, but this case became the most prominent example of a securities regulator targeting an initial coin offering (ICO).
Exchanges may allow cryptocurrency trading due to the decision supporting the view that cryptocurrency transactions are not securities transactions. However, the SEC’s decision could be subject to appeal.
