On July 13, 2023, Ripple Labs, a cryptocurrency-based software company, secured victory in its legal battle against United States (US) Securities and Exchange Commission (SEC). Experts believe that this development can help create the long-awaited regulatory landscape around the cryptocurrency industry.
“I believe that this ruling brings clarity for crypto. While crypto has its reported share of bad actors, I consider that majority of crypto participants are here to innovate and build the ecosystem. Rulings like these can help build confidence for all the builders as well as the investors’ ecosystem,” Nischal Shetty, co-founder, Shardeum, a layer-1 blockchain platform, told FE Blockchain.
Going by the verdict, Analisa Torres, US District Judge, stated that Ripple Labs didn’t hamper federal securities laws, by conducting XRP token-based transactions on public exchanges. However, Torres ruled part of the judgement in favour of SEC, by also mentioning that XRP token qualifies as a security upon sale to institutional investors, according to Howey Test, a legal test conducted in US.
Post the development, XRP token witnessed an overall 75% rise in value, going by data from Refinitiv Eikon, a financial analysis platform. Immediately after the judgement was passed, XRP token reportedly rose from $0.45 to $0.61. As things stand on July 14, 2023 (16.27 pm, Indian Standard Time), CoinMarketCap, a crypto-price tracking website, showed that XRP token was trading at nearly $0.80, having a $41.58 billion worth market capitalisation.
“As seen from the surge in XRP’s market capitalisation and price following the ruling, investors can see this as a development and could be willing to invest in XRP. Furthermore, the ruling could lead to re-listing of XRP on exchanges,” Sumit Ghosh, co-founder and CEO, Chingari, a Web3.0 short video application, highlighted.
According to Nicklas Nilsson, thematic intelligence consultant, GlobalData, a data analytics company, the ruling will shed light on all SEC-based enforcement actions against crypto, since the year’s beginning. “There has been a growing sense that the SEC would lose this case, especially towards the end of last year. The question then becomes; did the SEC think they would lose, and if so, has recent enforcement action been an attempt to muddle the water, hoping to get a few high-profile wins before the Ripple ruling?” Nilsson added.
“I think global crypto market saw a 4.69% increase in the last 24 hours. Market participants should take this verdict as a booster. The market is expected to carry this momentum ahead, and is likely to be bullish,” Edul Patel, co-founder and CEO, co-founder and CTO, Mudrex, a crypto-investing platform, concluded.
The case between Ripple and US SEC dates back to December, 2020. During that period, SEC accused Ripple, and its co-founder Chris Larsen and CEO Brad Garlinghouse, of illegally collecting $1.3 billion from XRP token sales, beginning in 2013. In September, 2022, both the parties decided to go for an ultimatum, ruled by a federal court judge.