The lawsuit between the US Security and Exchange Commission and the Ripple saw a major breakthrough today after the court ruled that XRP is not a security. In a July 13 judgement delivered by Judge Analisa Torres, the court ruled that XRP does not fulfill the criteria of being a security.
The court said it considered the economic reality and totality of circumstances to arrive at its ruling. Notably, this judgment thus places Ripple, the defendant in the case as the winner of the 3-year old battle.
A few minutes after the news of the judgment dominated the airspace, the price of XRP rose to $0.61 from $0.45. This represents about 25% increase in value of the crypto as of press time.
Side Notes on the Ripple vs SEC lawsuit
Worthy of note that the lawsuit between the SEC and Ripple has been ongoing since 2020. Then, the regulator filed a complaint against the crypto firm and its executives, accusing them of amassing money through the sale of unregistered securities. In the filing, SEC said the co-founder of the firm, Christian Larsen, and the CEO, Brad Garlinghouse made $1.3 billion from the deal. It identified XRP as a security that ought to be registered in line with the existing financial laws in the country.
Ripple, in its response, at that time, slammed SEC for classifying XRP as a security. In a 93-page document, the firm insisted that the regulator lacks the power to mandate the registration of its offerings. Also, Garlinghouse, in a tweet, accused the SEC of bullying Ripple with its legal complaint.
This lawsuit birthed several arguments across the industry as to whether crypto is truly a security or not. As the case proceeded, the SEC allegedly decided to hide the “Hinman document” from the proceeding. The “Hinman” document is regarded as strong evidence with the capacity to give a headway on the legal battle. Hinman was the former chairman of the regulatory body. While serving as the chairman, he declared that Ethereum was never a security. The court, however, ordered the SEC to release the document to foster the determination of the case.
Certainly, today’s judgment will serve as a precedence for a few other related cases in court.
Read More: