Ripple’s legal victory has triggered a crypto market rally as the company emerged victorious in its three-year legal battle against the SEC.. In a notable judgment, the United States District Court in Southern New York ruled that Ripple’s XRP token should not be considered a security. This victory has fueled a surge of positive market sentiment.
The SEC had filed a lawsuit against Ripple Labs in 2020, alleging that the company violated federal securities laws through the sale of XRP. However, the court’s ruling challenges the SEC’s premise, stating that XRP does not qualify as a security, which has substantial implications for the wider cryptocurrency ecosystem.
Judge Analisa Torres, presiding over the case, partially ruled in favour of Ripple Labs while granting a portion of the SEC’s motion concerning institutional sales. This ruling acknowledges the existence of investment contracts in certain instances but concludes that XRP itself does not fit the definition of an investment contract under the Howey test.
The outcome of this case is highly significant as it clarifies the regulatory landscape for cryptocurrencies, prompting speculation about potential changes in how other tokens are classified. Experts believe that the ruling may compel the SEC to review its approach to similar ongoing cases, distinguishing between securities and commodities.
The crypto market responded swiftly to the news, with the price of XRP soaring by 80% reaching $0.9473 as investors celebrated the legal victory. This surge, fueled by optimism and renewed confidence, indicates the positive impact Ripple’s win has had on market sentiment.
