Ripple Wins Lawsuit? SEC Hits a Wall! XRP Not Deemed a Security or Investment Contract, Crypto Community Secures Regulatory Victory?

XRP issuing company Ripple Labs scored a rare "regulatory victory" for the cryptocurrency industry on July 13, as Judge Analisa Torres of the Southern District of New York ruled on a lawsuit brought by the U.S. Securities and Exchange Commission (SEC) in 2020: Ripple's XRP token is not a security.

However, this is not the final outcome, as there will be further proceedings.

Judge's View on XRP: Institutional Sales Are Securities, Others Are Not

Due to past securities lawsuits filed by the SEC, Ripple has ceased XRP token sales.

Venture capitalist Adam Cochran commented that based on court documents, the judge believes that the institutional sales conducted by Ripple Labs did make XRP qualify as securities.

However, the later "programmatic sales" conducted by Ripple Labs did not meet the criteria of an investment contract under the Howey Test. Selling through exchange order books is acceptable as long as it is not through methods like ICO/IEO/Launchpad.

The court documents state:

"The vast majority of individuals buying XRP from digital asset exchanges did not invest in Ripple with their money, while institutional buyers consciously purchased XRP from Ripple directly under contract."

Crypto Community News: Rewarding XRP, Investing with XRP Not Considered Securities

The court documents indicate: "After considering the economic reality and the overall circumstances, the Court concludes that Ripple's other distributions do not constitute offers and sales of investment contracts." Venture capitalist Adam Cochran therefore believes that rewarding XRP and investing with XRP will not be considered securities.

XRP Victory, a Major Win for the Crypto Community

Venture capitalist Adam Cochran states that overall, this is a huge victory.

Since XRP is one of the more centralized foundations with a key figure leading, the foundation conducts standard sales and formal distribution plans through exchanges. If these are not considered securities, then almost everything sold through exchanges wouldn't be either.

XRP Securities Resolution Methods

Venture capitalist Adam Cochran summarizes:

– Avoid institutional private placements/OTC trading
– Sales through exchanges
– Distribution through the protocol itself
– Ignore SEC Chairman Gary Gensler

XRP Judgment Still Pending

The court documents state that the court will promptly issue another order setting a trial date and related pretrial deadlines. This indicates that the case is not yet concluded, and further proceedings will take place before a final outcome is reached.

If XRP is Not a Security, BTC and ETH Are Even Less Likely

XRP surged over 30% upon hearing the news, while BTC touched the 31K level and ETH broke through 1900.