XRP’s Historical Victory Over the SEC - What this Means for Crypto | Weekly Digest
Welcome to another Crypto Weekly Digest brought to you by VirtualBacon.
This week, our focus is on a significant milestone that has stirred up the crypto world - the verdict in the much-anticipated case of Ripple (XRP) versus the SEC. This landmark case has been in the limelight for quite some time now, and the recent verdict, favoring Ripple, has set a new precedent in the realm of crypto regulation.
We'll delve deep into this groundbreaking verdict, explore its immediate impact, dissect what it means for the future of XRP, and how it may influence the broader cryptocurrency market. Let's dive in!
The Verdict: A Huge Victory for Ripple and XRP
In a pivotal moment for the crypto space, the U.S. District Court Judge Analisa Torres delivered a final ruling in the protracted lawsuit between Ripple and the SEC. Judge Torres' decision clears XRP from being classified as an unregistered security. This significant verdict helps lift the grey cloud that has hovered over XRP for years, and it's a considerable stride towards clarifying its legal status.
https://cointelegraph.com/news/ripple-wins-case-against-sec-as-judge-rules-xrp-is-not-a-security
The lawsuit commenced in December 2020 when the SEC charged Ripple with conducting a $1.3 billion unregistered securities offering using XRP. The court now finds that Ripple's sales of XRP to institutions were unregistered securities, but the sales to the general public and distributions by Ripple and its key executives, Brad Garlinghouse and Chris Larson, did not meet the same criteria.
The SEC's actions against Ripple were viewed by some as an attack rather than protection for investors, leading to XRP's delisting from numerous exchanges and causing significant damage to its market position. The relentless pursuit of Ripple formed part of a larger trend, with the SEC turning its attention to other major players in the crypto space, such as Binance and Coinbase.
Regardless of your personal stance on XRP, this verdict is a milestone for the broader cryptocurrency industry, signaling a pushback against regulatory overreach.
SEC v. Ripple in brief:
— Bill Hughes : wchughes.eth 🦊 (@BillHughesDC) July 13, 2023
Ripple putting XRP on exchanges for trading (and funding their operation with those sales) is NOT an investment contract, and therefore not a security.
Ripple paying people in XRP is NOT an investment contract and therefore not a security.
XRP is NOT a… https://t.co/FzlPbkKH21
The tweet above provides a clear summary of the verdict. Yet, a question remains: Does this mark the conclusion of the extended legal battle between Ripple and the SEC?
Despite the victorious ruling, it's worth noting that the chapter on institutional sales of XRP — the only aspect found to breach the law — is yet to be closed. The SEC, known for its persistence, is likely to pursue this further.
Ripple vs SEC: A Retrospective
The Ripple vs. SEC case, beginning in December 2020, has been a rollercoaster ride marked by intense arguments, significant rulings, and strategic victories. Let's revisit the pivotal moments that shaped this landmark case.
- December 2020: The SEC filed a lawsuit against Ripple, alleging the company had raised $1.3 billion through an unregistered securities offering with XRP. Ripple swiftly refuted these claims, marking the start of the intense legal battle.
https://www.sec.gov/news/press-release/2020-338
- January 2021: XRP loses significant market value due to the lawsuit and major cryptocurrency exchanges like Coinbase, Binance US, eToro, and OKCoin announce they will suspend trading of XRP.
https://cointelegraph.com/news/us-exchanges-are-suspending-or-delisting-xrp-left-and-right
- April 2021: Ripple is granted access to the SEC's internal communications on how it determines whether a cryptocurrency is a security, to defend itself in the lawsuit.
- May 2021- Ripple wins discovery: SEC must hand over internal documents on Bitcoin, Ether and XRP.
https://decrypt.co/64166/ripple-wins-ruling-expose-sec-docs-bitcoin-ethereum/
- July 2023 - Ripple comes out on top.
As we look back on Ripple's long, challenging legal journey, their unshaken belief stands out. Despite the hurdles, their victory not only vindicates them, but also signals hope for the broader crypto industry. This case might well be a landmark in the evolution of cryptocurrency regulation, setting the stage for a more confident and innovative future.
Repercussions for the SEC and Ongoing Cases
With the verdict now delivered, the SEC finds itself in a new landscape. The regulator responded to the ruling with the following statement:
🚨BREAKING: The @SECGov responds to @FoxBusiness with a statement on today’s #Ripple ruling: pic.twitter.com/9rbggXkJSP
— Eleanor Terrett (@EleanorTerrett) July 13, 2023
However, the SEC's reaction faced significant backlash. Critics highlighted the SEC's satisfaction in finding a violation of law, questioning whether the regulator’s true objective is more punitive than protective towards consumers.
This has led to a shift in perception within the crypto community. Many believe that the SEC's reputation and the fear it once instilled has been lessened by this verdict. If XRP sales on exchanges aren't considered securities, it implies that all crypto sales on exchanges escape the same classification.
The sale of XRP on exchanges is NOT a security. Which means the sales of all cryptos on exchanges are NOT securities and @SECGov and @GaryGensler have NO jurisdiction over them. This is a watershed moment that relegates the SEC to TradFi and makes it a dinosaur regulator. Buh-bye pic.twitter.com/PRuumqQBEL
— Cameron Winklevoss (@cameron) July 13, 2023
This has further implications for the SEC's ongoing disputes with Binance and Coinbase. Questions are now surfacing about where this verdict leaves these cases. As the dust settles on the Ripple-XRP case, many eyes will remain focused on the SEC's next moves, using this ruling as a precedent to challenge future accusations from the regulator.
The Ripple ruling today decimates the @SECGov's case against @coinbase. Have fun with that one @GaryGensler. https://t.co/2lfFXxX2Xf
— Tyler Winklevoss (@tyler) July 13, 2023
US Exchanges Rush to Relist XRP
The good news didn't stop at XRP's price surge. Several exchanges, including Coinbase, Kraken, and Bitstamp, quickly announced plans to relist XRP. They were followed by iTrustCapital, Crypto.com and Gemini. This marks the beginning of XRP's reintroduction into the market, with more exchanges likely to follow, showing the ripple effect of the case verdict.
Ripple Effect: XRP Surges to 4th Largest Crypto
After Ripple's landmark victory, the crypto market quickly reacted. XRP's price surged by an incredible 72% within a few hours, touching the $0.90 mark, and overtaking USDC and BNB to secure 4th place by market cap.
$XRP is now ranked 4th.
— Crypto Bubbles (@CryptoBubbles) July 13, 2023
In just a few hours it has risen two ranks and +72% in price! pic.twitter.com/KMDI9Dxk1s
The impact was felt across the market, with BTC shooting past $31,000 to set a new yearly high, and ETH breaking the $2,000 barrier. After a challenging few months, the crypto market was definitely in celebration mode with the total market cap heading back above the $1.3 trillion mark.
Other Altcoins Targeted by SEC also Rallied
Interestingly, the coins that saw the biggest gains were those recently identified as securities by the SEC. It seems the Ripple verdict breathed new life into these tokens, causing a noticeable boost in market confidence.
People now think these coins with similar structures are also safe. (ADA, SOL, MATIC, ATOM, ALGO, etc)
Has the reputation and fear from the SEC been diminished from the XRP Lawsuit news?
The sentiment around these coins was shared among others within the space.
$XRP is officially not a security according to the US Judge!
— The DeFi Investor 🔎 (@TheDeFinvestor) July 13, 2023
This has massive implications for crypto.
If $XRP isn't security, then most tokens that were deemed as securities aren't either. pic.twitter.com/lFZRloWmqP
SEC’s Case Against Coinbase Also is Under Question
Since the lawsuit claims direct listings of tokens on the exchange is not security offering, Where does this leave their current case with Coinbase and Binance?
This has further implications for the SEC's ongoing disputes with Binance and Coinbase. Questions are now surfacing about where this verdict leaves these cases. As the dust settles on the Ripple-XRP case, many eyes will remain focused on the SEC's next moves, using this ruling as a precedent to challenge future accusations from the regulator.
The Ripple ruling today decimates the @SECGov's case against @coinbase. Have fun with that one @GaryGensler. https://t.co/2lfFXxX2Xf
— Tyler Winklevoss (@tyler) July 13, 2023
The Future of XRP
With Ripple's significant victory, a dark regulatory cloud that had overshadowed the project for years has finally lifted. This not only brings cheer to Ripple and its supporters but also instills renewed confidence in the future of the project. Now, Ripple can shift focus from legal battles to advancing its technology and forging new partnerships, all without the constant worry about securities regulations.
Moreover, this ruling sets a precedent that could significantly influence the classification and regulation of other coins. The impact on investor sentiment and market dynamics might be huge and is worth watching closely.
Interestingly, a day before the ruling, the Bank of Japan announced its plans to use XRP for cross-border payments, a testament to the ongoing faith in XRP.
https://www.thecryptoalert.com/post/bank-of-japan-to-use-xrp-to-facilitate-cross-border-payments
This shows that even amid legal turmoil, the confidence in XRP remained unscathed. Now, with the lawsuit resolved favorably, we can expect to see more institutions following the Bank of Japan's footsteps, integrating XRP into their operations.
All in all, the verdict has thrown open a bright and promising path for XRP's future, positioning it strongly in the dynamic landscape of cryptocurrencies.
What Does This Mean for the Larger Crypto Space?
Some questions are still left unanswered:
- Exchange sales of XRP are not securities, but what about ICO/IEO/Launchpads? How will projects launch their tokens from now on?
- What will the effects be for payment coins with similar usecase to XRP? (XLM, XDC, ALGO, HBAR, QNT, etc)
- Will Ripple be on the hook for the sales to institutional investors, which were deemed as unregistered security offerings?
- Will the SEC appeal this decision to second circuit? And when will it overrule this decision?
- What are the future milestones of XRP to look forward to?
Stay tuned for an in-depth video on the channel covering these topics and more about the future potential of XRP.
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