Ripple Beats the SEC: XRP Up 70%
In a groundbreaking legal win for the cryptocurrency industry, a U.S. judge ruled on Thursday that Ripple Labs Inc had not violated federal securities law by selling its XRP token on public exchanges.
The cryptocurrency XRP skyrocketed more than 70% today after a federal judge ruled that sales of the token did not constitute a security offering. The decision, made by a judge representing the District Court for the Southern District of New York, brought finality to a lawsuit against Ripple Laps brought forth by the Securities and Exchange Commission in 2020.
Since that time, much drama has ensued between Ripple Labs (the issuer of XRP) and the SEC, including the release of the Hinman Documents last month and Ripple Labs CEO Brad Garlinghouse’s tirade against SEC lawsuits, which he called, “an assault on crypto at large.”
Almost all cryptocurrencies rallied after the court's decision. Perhaps the biggest winner from this news was the Ethereum blockchain and all the decentralized applications that operate under that blockchain’s ecosystem.
Ether (ETH) rallied 6% on the news while the DeFi tokens Uniswap (UNI) and Lido (LIDO) are up 8% and 16% respectively as we go to press. Leading the pack is layer 2 scaling solution Polygon (MATIC), which has rallied an astounding 18% on the day.
As to be expected, Bitcoin (BTC) has lagged behind the broader crypto market today. For the last month (since the SEC filed lawsuits against Coinbase (COIN) and Binance (BNB), Bitcoin has largely outperformed other cryptos due to its non-security nature.
Bitcoin dominance, which compares the market cap of Bitcoin against the entire crypto market, was down sharply following the verdict:
The SEC's ruling has brought a ray of hope and clarity to a frustrated cryptocurrency market. Investors are betting today that the ruling today will set a precedent for the inevitable crypto lawsuits to come.
The ruling today, however, was not cut-and-dry. Analisa Torres, the presiding judge, stated that the sales of XRP to institutional investors were indeed unregistered securities offerings.
But the most important takeaway from today’s decision is XRP is not in and of itself a security.
The Ripple case is a monumental development in establishing that a token is separate and distinct from an investment contract it may or may not be part of. Now, let’s make it law. 👇 pic.twitter.com/FZtO1BzfWX
— Tom Emmer (@GOPMajorityWhip) July 13, 2023
I expect altcoins, or any coin that is not bitcoin, to outperform over the next few weeks on this news.
Mike Martin, head of content for tastycrypto, has more than 15 years of experience in the investing and trading industry.
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