- The SEC vs Ripple verdict essentially determined that XRP is not a security, however, its sale can be classified as one.
- The ruling implies any cryptocurrency could be a security, based on the transaction and nature of sale, institutional or secondary market.
- The decision could apply to cryptos like MATIC, ADA and others recognized as a security by the SEC, building the regulator’s cases against Binance and Coinbase.
Ripple's partial win against the Securities and Exchange Commission (SEC) has pushed cryptocurrencies into untested waters. Any cryptocurrency classified as a “security” or “non-security” can be treated differently based on the nature of the transaction.
Industry experts weighed in on the XRP ruling to alleviate holders’ concerns.
FXStreet has extensively covered the SEC vs Ripple case:
- SEC vs. Ripple update: Former SEC official explains why Ripple’s win could be overturned
- SEC vs. Ripple: Attorney John Deaton says Ripple will appeal to the Supreme Court if it loses
- Pro-XRP attorney predicts the altcoin’s rally to $2 ahead of SEC vs. Ripple verdict
XRP ruling strengthened the crypto market but changed this for all assets
Ripple’s partial win in the US SEC case was celebrated by market participants and XRP price witnessed a massive rally. The court essentially ruled that XRP token in itself is not a security, however, its sale can be classified as such under specific circumstances.
Judge Torres’ ruling indicates the potential for cryptocurrencies labeled as “securities” and “non-securities” both to be classified differently based on the context and mode of their sale. If buyers expect to profit from the company’s efforts, it is likely to be considered a security.
This complicates the regulation of cryptocurrencies and opens all assets to scrutiny, irrespective of the SEC’s label for the crypto. MATIC and ADA were labeled as securities by the SEC in its lawsuits against two of the largest cryptocurrency exchanges Binance and Coinbase.
The assets that did not make the SEC’s list could classify as securities depending on the conditions of their use.
Experts weigh in on XRP ruling
Robert Quartly-Janeiro, Chief Strategy Officer (CSO) of crypto exchange Bitrue, sees the ruling as a potential watershed moment for the broader crypto ecosystem. The CSO told FXStreet:
Despite the difficulties that Ripple and its currency XRP have faced in recent years, the company has confronted these challenges and continued to progress and develop. Clearly those who sold off during the period of uncertainty have sort to return, alongside speculators trading on the news itself but the new price of XRP will be interesting to see where it settles in due course.
Nikolay Denisenko, Co-founder and CTO at Brighty app, a Swiss Neobank told FXStreet,
Ripple was found to have violated securities law by directly selling XRP to sophisticated investors, a point the SEC is likely to utilize in future cases. The case is not entirely resolved, as the court deemed Ripple's XRP sales to institutional investors unregistered securities. This issue will be further explored in a jury trial, determining Ripple executives' involvement in these illicit sales.
Denisenko believes that the ruling will likely spark renewed calls for regulatory clarity regarding digital assets.
Ripple's case, although an overall victory for the company, plainly shows the need for a balance between regulatory compliance and fostering crypto innovation.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.