SEC vs Ripple: The final ruling is here and this is what it means
On 13 July, the SEC vs Ripple case finally reached a decision. The judge stated that XRP was not a security. As per data from CoinMarketCap, XRP shot up by double digits in the last hour of the time of writing.
- As per the final judgment on the SEC vs Ripple lawsuit, XRP did not constitute the offer and sale of investment contracts.
- However, the sale of XRP constituted the unregistered offer and sale of investment contracts in violation of Section 5 of the Securities Act.
Is XRP a security? Ever since the Securities and Exchange Commission (SEC) filed its lawsuit against Ripple in 2020, the answer to this question has given many in the crypto community sleepless nights. However, as of 13 July 2023, it could be stated that XRP was in fact not a security.
Crypto reporter, db, took to Twitter to share the news with the community.
[DB] Ripple Sales of XRP Do Not Constitute Offer of Investment Contracts: Judge
— db (@tier10k) July 13, 2023
The ruling stated that the sale of XRP constituted the unregistered offer and sale of investment contracts in violation of Section 5 of the Securities Act. Furthermore, it also mentioned that,
For the foregoing reasons,the SEC’s motion for summary judgment is GRANTED as to the Institutional Sales, and otherwise DENIED. Defendants’ motion for summary judgment is GRANTED as to the Programmatic Sales, the Other Distributions, and Larsen’s and Garlinghouse’s sales, and DENIED as to the Institutional Sales.
The ruling also stated that the case would go to trial. Furthermore, the court stated that it would issue a separate order for setting a trial date and pre-trial deadlines.
Read XRP’s Price Prediction 2023-24
Events of the past
In 2020, the SEC filed a lawsuit against Ripple and its current and former CEOs for the sale of an unregistered security, XRP. The SEC also claimed that the sale of XRP was an IPO of unregistered securities.
However, Brad Garlinhouse shared his displeasure and took to Twitter to share his thoughts about the claims made by the SEC.
We know crypto and blockchain technologies aren’t going anywhere. Ripple has and will continue to use XRP because it is the best digital asset for payments – speed, cost, scalability and energy efficiency. It’s traded on 200+ exchanges globally and will continue to thrive. (2/3)
— Brad Garlinghouse (@bgarlinghouse) December 22, 2020
Additionally, Ripple also claimed that they never received any notice from the SEC. Over the last two years, several important developments have taken place.
And the most important development in favor of XRP took place on 29 September 2022. This was when the Judge ruled that Hinman’s speech wouldn’t be ruled out. Recall that the former SEC corporation Finance Division Director claimed that ETH wasn’t a security because it was sufficiently decentralized.
Additionally, on 2 December 2022, the SEC and Ripple filed their redacted final arguments for the lawsuit.
Is this good or bad for XRP?
Well, according to Adam Cochran, Managing Partner at Cinneamhain Ventures, the final judgment mostly stands in favor of XRP. However, he stated that the programmatic sale of XRP didn’t meet the third prong of the Howey test.
All in all, Cochran called this a huge win for XRP and also stated that if XRP wasn’t a security, Bitcoin [BTC] and Ethereum [ETH] weren’t securities either.
1/5
Ripple case, here is the good and the bad.
But it is mostly *VERY* good for all alts, and a surprisingly big win for XRP.
First Judge did decide institutional sales/fundraising was securities. pic.twitter.com/esmjcIrzN0
— Adam Cochran (adamscochran.eth) (@adamscochran) July 13, 2023
Furthermore, with the ruling in favor of XRP, data from CoinMarketCap stated that XRP surged by a massive 25.64% in the last hour. Additionally, it was exchanging hands at $0.5863 and was 26.79% up in the last 24 hours.
How much are 1, 10, 100 XRP worth today?
Ripple CEO, Brad Garlinghouse too expressed his delight by taking to Twitter in light of the latest ruling.
We said in Dec 2020 that we were on the right side of the law, and will be on the right side of history. Thankful to everyone who helped us get to today’s decision – one that is for all crypto innovation in the US. More to come.
— Brad Garlinghouse (@bgarlinghouse) July 13, 2023
