In a landmark decision that positions Ripple at the forefront of a key legal maneuver, US District Judge Analisa Torres favored Ripple in a lawsuit initiated by the US SEC in December 2020. The SEC claimed that Ripple had amassed an impressive $1.3 billion through the sale of what they believed should be classified as securities – Ripple’s XRP.
However, the course of events took a stunning turn as the court made it clear that programmatic XRP sales don’t fit into the investment contract category since they lack the actual constructs of institutional sales. This ultimately implies that investors don’t have an understandable expectation to gain profits through the sole efforts of XRP sellers.
The court further elaborated on their decision by highlighting that Ripple failed to offer any guarantees or proposals in relation to programmatic sales. The purchasing process maintained an air of anonymity that dulled possible expectations of any preferential treatment or outcomes. This ruling brings newfound regulatory clarity to the dynamic arena of cryptocurrency, while also providing a clearer legal structure around XRP.
The rejection of SEC’s claims has revitalized Ripple’s faith in preaching the genuineness of XRP as a cryptocurrency. It has reinforced the company’s push that XRP should be seen as a key player in cross-border transactions, rather than falling under SEC regulations.
Interestingly, Ripple’s victory, although it struck a crippling blow to their business image and XRP value, empowers the company to further establish that XRP straddles the space of currency and not security.
Following the court ruling, Ripple’s fortunes seem to be on the upswing with XRP’s price hiking by over 23%. The soaring price, from roughly $0.473 to a wholesome $0.6472, indicates that the legal victory has eliminated one of Ripple’s most prominent risk factors. This decision does not just put XRP on the cryptocurrency map, but it also inches it closer to attaining the monumental $1 mark as earlier predicted by analysts. Often seen as a hesitant participant, the results of the lawsuit could now see institutional investors indulge more robustly in Ripple’s XRP.