In a major legal victory for Ripple, the Southern District of New York reigned that the programmatic sale of the company and other distributions of XRP did not constitute an offer and sale of investment contracts.
However, the court ruled that Ripple’s institutional sale of XRP did indeed constitute an unregistered offering and sale of investment contracts in violation of Section 5 of the Securities Act.
According to according to analyst Adam Cochran, the ruling is mostly excellent news for Ripple and XRP, providing greater regulatory clarity and paving the way for greater cryptocurrency adoption.
The court ruled that sales to users on exchanges were “fine” if they were made through order books and not through ICO/IEO/Launchpad-like platforms. Other activities, such as bounties, investments in others using XRP, grants using XRP, and transfers to executives in XRP were also not considered securities.
XRP has long been considered one of the more centralized fundamentals in cryptocurrency, with a major figurehead and standard selling through exchanges. According to Cochran, the court ruling suggests that if XRP is not security, neither are Bitcoin or Ethereum.
In addition, Cochran believes the ruling is a win for exchanges as well, as it suggests all sales will flow through public order books again, without any billions left in convertible funding rounds to begin with. This could make it easier for investors to trade XRP and other cryptocurrencies on regulated exchanges.
XRP price rises as Ripple wins legal battle against SEC
The recent ruling in favor of Ripple represents a significant legal victory and the market has taken the news positively. The price of XRP has risen significantly since the ruling, with the cryptocurrency posting gains of more than 33% in the hours following the announcement.
In addition, institutional investors have been cautious about investing in XRP due to the ongoing legal battle with the SEC, which has led to uncertainty about the cryptocurrency’s legal status.
The recent ruling offers more clarity and certainty, which could help to allay some of these concerns and make XRP a more attractive option for institutional investors.
At the time of writing, XRP has reached a major milestone by hitting the $0.6324 mark, which has not been reached since May 2022. This new yearly high is a positive indication of the cryptocurrency’s continued upward trend.
The ADX, a technical indicator that measures the strength of a trend, is currently moving upwards, indicating a possible continuation of XRP’s upward momentum.
XRP’s squeeze-bear momentum indicator also shows the beginning of significant upward movement, indicating that the cryptocurrency may be poised for further gains. These factors could be the perfect ingredients for XRP to reach the $1 mark.
Despite the cryptocurrency’s optimism, XRP will soon face two major levels of resistance. The first wall of resistance is at $0.7769, which could be the first obstacle to the $1 mark. The second more challenging wall is the $0.8627 level, which has not been reached since the first quarter of 2022.
This price increase marks a significant turnaround for XRP, which has struggled in the wake of the SEC lawsuit. The ruling is likely to have a positive impact on investor sentiment as it provides greater clarity and certainty about the token’s regulatory status.
Featured image of Unsplash, chart from TradingView.com
