In an extraordinary turn of events, Ripple’s XRP token skyrocketed by as much as 16% following the verdict in favor of Ripple Labs in the ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC). The news came as a sigh of relief for XRP investors, sending the cryptocurrency into a frenzy, catapulting it into the top five largest cryptocurrencies by total market capitalization.
Ripple Labs Inc, the company behind XRP, stood accused of conducting a $1.3 billion unregistered securities offering by selling XRP. The SEC contended that Ripple’s sales to hedge funds and other institutional buyers amounted to unregistered securities sales. However, in a surprising twist, U.S. District Judge Analisa Torres ruled that Ripple’s institutional sales did not constitute the unregistered offer and sale of investment contracts, marking a significant legal victory for Ripple.
The ongoing case had cast a cloud over Ripple since December 2020 when the SEC launched its lawsuit against the company and its two chief executives, Brad Garlinghouse and Chris Larsen. The SEC alleged that Ripple’s sale of XRP tokens was an offer of unregistered securities, a claim that Ripple has vigorously disputed.
According to Judge Torres’ ruling, the SEC failed to establish that Ripple’s sales of XRP constituted an investment contract. Despite this win for Ripple, other aspects of the SEC’s claims are set to be decided by a jury, meaning the trial continues.
The victory did not just resound in the courtroom but was echoed on the trading floor as well. Ripple’s XRP price leaped from $0.45 to $0.61 within minutes of the news breaking out, reflecting a surge of more than 25%.
The ripple effect (pun intended) of this legal victory sent waves of jubilation throughout the cryptocurrency community, who’ve been intently following this case. The market response has been overwhelmingly positive as evidenced by the swift and significant appreciation in the value of XRP.
This pivotal turn in the Ripple-SEC saga underscores the broader debate around the classification of digital tokens and the regulation of the crypto industry. For now, Ripple rides the wave of victory, but the final outcome of the trial remains to be seen.