Crypto Scores a Much-Needed Win
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Recently, the XRP came under scrutiny when its developer was accused of not complying with federal securities laws. In short, Ripple Labs shouldn’t have offered XRP on public exchanges, or so the system thought. It resulted in a sharp price drop for XRP which was otherwise a pretty valuable token. This was only one of SEC’s many ongoing legal battles against cryptocurrency, but with the latest win, it shows that crypto is still alive, and provides a ray of sunlight in these dark crypto times.
‘Not Necessarily a Security’
Judge Analisa Torres from NY’s Southern District which had the case in her hands ruled on Thursday that XRP is not ‘necessarily a security token’. This means that Ripple Labs did nothing wrong when it offered it on public exchanges such as Binance. That’s a huge argument against the Securities and Exchange commission which is trying to shut down the crypto market once and for all.
The ruling also did something more important. It validated the crypto industry’s claims that digital assets should never be regulated as securities. The SEC and its chief Gary Gensler obviously have other ideas, but this ruling shows they can’t win all the fights. Once the news broke out XRP went up by over 70%, regaining some of its previously lost price. It current sits just over 90 cents.
It wasn’t all great news, though. Torres partly ruled that some XRP sales – such as payments to hedge funds and elite buyers – violated securities laws. And, while that was a letdown, Ripple’s CLO called it what it is – a huge win for the crypto ecosystem.
The SEC considered it a win as well, saying that it confirmed their suspicions that some XRP transactions are illegal. Gensler said that the watchdog will continue reviewing the situation until everything goes their way.
A Long and Hard Battle
Thursday’s ruling was the climax of a long-running battle that stretches back at least 3 years. It set a precedent for other crypto cases. The new ruling has the potential to change the SEC’s enforcement efforts. It shows that crypto has the power to fight such battles and come out a winner. The SEC might want to shut things down, but it’ll have to try harder.
Crypto investors and experts were delighted about the win. The market hasn’t had a share of positive news past year, with FTX’s demise and the SEC’s legal fights. Some could say that the crypto industry has had a dark cloud hanging over it as soon as the SEC went after Coinbase first and Binance later. It was the drop that ruined it all, so small wins like this one are a much-needed ray of light in these dark times.
