The court ruled that Ripple is not a security considering programmatic sales on crypto exchanges.
Ripple Labs savored a partial win on July 13th, as Judge Analisa Torres of the United States District Court in the Southern District of New York ruled that the company's token, XRP, is not a security in certain circumstances.
According to the court's documents, Torres ruled that XRP, the cryptocurrency at the center of the Securities and Exchange Commission lawsuit, is not a security when it comes to programmatic sales on digital asset trading platforms.
Did you know?
Subscribe - We publish new crypto explainer videos every week!
What is IOTA's Tangle? IOTA & mIOTA Animated Explainer
However, the XRP wasn't entirely absolved. The SEC also scored a win, as Torres declared that when sold to institutional investors, XRP is a security. This ruling aligns with the Howey Test criteria, which determines whether certain transactions qualify as "investment contracts."
In particular, the court ruling reads:
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.
Ripple found itself in the SEC's crosshairs as the Commission sought to categorize XRP as a security, thus requiring further regulatory oversight. Ripple's dispute with the SEC dates back to December 2020, when accusations arose that the company and its leading executives, Brad Garlinghouse and Chris Larsen, were selling unregistered security.
This lengthy legal confrontation has been a roller-coaster, marked by dramatic episodes like the unveiling of the "Hinman Documents" and persistent denial of the SEC's allegations by Garlinghouse.
Following this legal development, the financial markets reacted swiftly. In mere minutes XRP's value rocketed from $0.45 to $0.61, marking a surge of more than 25%. The news sparked an outpouring of cheer across the cryptocurrency community, influencing the XRP price to jump by over 60%, reaching $0.75 at the time of writing.
Concluding this tale of legal tussles and market dynamics, it's clear that the fight over XRP's status as security continues to be a complex and nuanced issue. However, for now, the tide seems to have turned partially in Ripple's favor.
