Ripple Labs achieved a significant legal victory when a U.S. judge ruled that the company did not violate federal securities law by selling its XRP token on public exchanges. This landmark decision is the first win for a cryptocurrency firm in a case brought by the U.S. Securities and Exchange Commission (SEC). The SEC considers most crypto tokens as securities, subjecting them to investor protection rules, leading to a closely watched legal battle.
Ripple CEO Brad Garlinghouse hailed the ruling as a "huge win" for Ripple and the U.S. cryptocurrency industry. The decision resulted in XRP's value surging by 75%. Nevertheless, the SEC obtained a partial victory, as the court also found that $728.9 million of XRP sales to hedge funds and sophisticated buyers were unregistered securities.
The ruling will likely empower other crypto firms facing similar disputes, providing them with valuable insights in their research for regulatory clarity from the SEC.
Moreover, the decision may trigger discussions and negotiations between Ripple and financial institutions. This could potentially lead to broader adoption of Ripple's On-Demand Liquidity (ODL) product that utilizes XRP for cross-border money transfers.