⚖️ On July 13th, a U.S. judge, Analisa Torres, issued a pretrial ruling in the Securities Exchange Commission’s (SECs) lawsuit against Ripple Labs.
👀 Ripple Labs developed the Ripple payment protocol, which created the XRP in June 2012 . In December 2020, the SEC sued Ripple and claimed the latter sold XRP tokens without registering them with the SEC.
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It meant the SEC defined XRP as a security, accusing Ripple of violating security laws in the U.S.
But the court ruled:
· The XRP token is not a security
· Ripple’s sales of XRP tokens on crypto exchanges is not a security offering
· The XRP token is only a security when sold to institutional investors
🔐 The SEC is cracking down on several players in the cryptocurrency space as the regulatory body believes digital assets to be unregistered securities. Alternatively, crypto participants define digital assets as a currency which suggests the asset class should be regulated by the Commodity Futures Trading Commission.
🚀 The price of the XRP token is up over 80% in the last weeks as the judgment was cheered by investors. Comparatively, trading volumes have surged from $700 million to more than $3.5 billion in this period. Valued at a market cap of $42 billion, XRP is the fourth largest cryptocurrency in the world today.
🇺🇸 The outcome of the verdict will have direct implications for crypto regulation in the U.S. and will act as a key catalyst for crypto players globally. It will also impact the lawsuits surrounding Binance and Coinbase, as the ‘crypto crackdown’ continues.