The cryptocurrency industry has won a significant legal victory for holders of Ripple and XRP. The US Securities and Exchange Commission (SEC) had accused Ripple of selling the token as an unregistered security in an ongoing lawsuit.
On Thursday, however, federal judge Analisa Torres ruled in Ripple’s favor, stating that selling XRP on exchanges does not classify as a security.
XRP ruling opens floodgates
Following the recent legal win for Ripple that clarified the legal status of the cryptocurrency, several major cryptocurrency exchanges have announced their plans to re-list the token. Among these exchanges are Coinbase and Gemini, two of the largest regulated cryptocurrency exchanges in the world.
Coinbase has announced that it will allow trading for XRP on the XRP network again, warning users not to send the asset to other networks to avoid losing money. Trading for XRP on Coinbase is expected to begin later today, subject to liquidity conditions being met.
Once there is sufficient supply of the asset, trading of XRP-USD, XRP-USDT and XRP-EUR trading pairs will be launched in phases.
Similarly, Gemini has too decided to pre-list XRP spot and derivatives trading. The announcement is significant for Ripple and XRP, as Gemini is known for strict regulatory compliance. The decision to list XRP could encourage other exchanges to follow suit, potentially leading to a surge in demand for the token.
Meanwhile, iTrustCapital, a leading self-directed alternative investment IRA platform in the US, has also announced his decision to offer the token again on his platform. The company cited greater clarity and confidence in the token’s legal status as the main reason for its decision, expressing its excitement at the potential for progress and mainstream adoption in the cryptocurrency industry.
The recent legal win for Ripple has sparked a renewed interest in the token as more exchanges and investors gain confidence in its legal standing. The move also reflects a broader trend among cryptocurrency exchanges to expand their offerings beyond traditional assets and to list a wider variety of tokens, including those once considered controversial or risky.
Wrinkle on the right side of history
Ripple CEO Brad Garlinghouse has expressed his gratitude to everyone who supported the company during its recent legal battle with the SEC. He has stated that the recent ruling in favor of Ripple and XRP is a win for the company and all crypto innovations in the US. Garlinghouse further stated:
We said in December 2020 that we were on the right side of the law and will be on the right side of history. Grateful to everyone who helped us reach today’s decision – a decision for all crypto innovation in the US. More to come.
The most important part of the ruling, according to Garlinghouse, is the finding that XRP in itself is not a “contract, transaction, or plan” that embodies the Howey requirements of an investment contract. This means that XRP is not a security and will not be subject to the same regulatory requirements as traditional securities.
Garlinghouse has emphasized that this finding is now a matter of law and cannot be adjudicated. This brings greater clarity and certainty to investors and market participants as they now have a better understanding of the legal status of XRP.
On the other hand, Ripple’s CLO has that too emphasized the need for a rational conversation about crypto regulation in the country. He believes the recent ruling provides a starting point for this conversation as it sets a legal precedent for the classification and regulation of digital assets.
Featured image of Unsplash, chart from TradingView.com