- Ripple ruling that states XRP is not a security in secondary market sales was cited by Judge in SEC vs. Binance lawsuit.
- The ruling acted as a precedent, and the Judge clarified whether secondary market sales of crypto were securities.
- XRP climbs above $0.48 resistance on Monday, extending gains by nearly 1%.
Ripple (XRP) ruling acted as a precedent when Judge Amy Berman Jackson ruled in the US Securities and Exchange Commission (SEC) vs. Binance lawsuit. The Judge for the US District Court for the District of Columbia dismissed part of the charges against Binance concerning the secondary market sales of Binance’s native BNB token.
The Judge relied on Judge Torres ruling in the SEC vs. Ripple lawsuit, where secondary market sales of the token did not satisfy the Howey test, and XRP was free of security status.
Daily digest market movers: Ripple ruling cited in SEC vs. Binance lawsuit
- Judge Analisa Torres’ ruling from July 2023 was used in the SEC vs. Binance lawsuit to determine whether a cryptocurrency is a security in secondary-market sales.
- Judge Jackson dismissed charges against Binance concerning secondary-market sales of its native token, BNB.
- The Ripple ruling laid the basis for dismissing the charges, and the Judge’s decision in the SEC vs. Binance lawsuit provided clarity on the “security” status of cryptocurrencies sold on exchange platforms.
- There has been no update in the SEC vs. Ripple lawsuit since the agency asked for $102.6 million in fines from the payment remittance firm on May 29.
- XRP holders await updates on the lawsuit and are closely following the launch of the stablecoin Real USD (RLUSD).
Technical analysis: XRP makes comeback above $0.48
XRP climbed above the key resistance of $0.48 on Monday. The altcoin extended gains by nearly 1% on the day. Ripple could fill the Fair Value Gap (FVG) between $0.4825 and $0.4841 and then rally to the next key resistance at $0.4955.
This level coincides with the 23.6% Fibonacci retracement of the decline from the March 11 peak of $0.7440 to the April 13 low of $0.4188. Further up, XRP faces resistance at the psychologically important $0.50 level.
The Moving Average Convergence Divergence (MACD) momentum indicator shows underlying positive momentum in the XRP price trend.
XRP/USDT daily chart
On the other hand, the altcoin could find support at $0.4508, the June 7 low for XRP. Further down, the April 13 low at $0.4188 is the key support for Ripple.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token. While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and will need to keep litigating over the around $729 million it received under written contracts.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at. Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say. Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation. While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
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