HomeOPINIONWill the XRP judgment set a precedence for other security lawsuits?

Will the XRP judgment set a precedence for other security lawsuits?


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The long-awaited lawsuit between the SEC and Ripple reached its dead end last week in the favour of the latter after the U.S. court delivered a judgment that XRP is not a security. Recall that the saga had been ongoing since 2020. Then, the SEC filed a complaint against the executives of Ripple, accusing them of amassing profit from the sale of unregistered securities. According to the U.S. regulator, Chris Larsen and Brad Garlinghouse amassed not less than $1.3 billion in the token sale. It claimed the firm ought to have registered the sold token in line with existing financial laws in the country.

Meanwhile, Ripple, in its defense at that time, described the filing as baseless. It insisted that XRP was never a security and thus should never be regarded as one. The firm also claim the SEC lacked the power to monitor its operations. Garlinghouse, at that time, labelled the agency as a regulatory bully. According to him, the Gensler-led SEC only want to cripple the crypto industry in the country through the clampdown. Meanwhile, in a bid to better defend itself and get a favorable judgment on the real status of XRP, Ripple hired the services of professional legal practitioners.

How the “Hinman Speech” Influenced the XRP judgment

Ever since, the lawsuit dragged for too long as if it was not going to end anymore. Both parties involved presented their arguments and evidences before the U.S. district Court. As a matter of fact, at a time, Ripple filed a motion, urging the Court to compel the SEC to release the Hinman speech. The firm understood the significance of the document in getting a favorable judgment as regards the real status of XRP. Worthy of note that the document contains a statement by Hinman, a former SEC chairman. Hinman, in the said speech, categorically insisted that Ethereum was not a security. Ripple considers Ethereum as an asset in the same status with XRP and thus saw the document as a good evidence.

Earlier, the SEC concealed the document from the lawsuit. However, the approval of the motion by the Court to compel the release of the document proved pivotal in the XRP judgment. But, it is worth establishing that there are still some other similar lawsuits that are still undecided. This thus birth questions as to whether the final outcome of the Ripple lawsuit would set a precedence for those lawsuits and define the future regulation of crypto in the U.S.

How the XRP Judgement will impact the future of crypto 

The XRP judgment indeed without a doubt will set a precedent for other cases relating to the classification of crypto assets as security. Existing cases between the United States Security and Exchange Commission and crypto exchanges like Binance and Coinbase are expected to take a new twist. However, the ruling may not apply to some cases as there will always be an exception. 

Nevertheless, it will still represent a substantial amount. Also, the XRP judgment to some extent has helped classify cryptocurrency. Removing XRP from the category of securities will surely lay the foundation for the classification of other crypto assets. Further, the XRP judgment didn’t only fortify Ripple’s stature in the industry. It also reinforces the other side of the debate that has always argued that crypto is not a security. However, the impact of the lawsuit will not focus on the classification of crypto alone. Instead, it will address other areas that need attention. Possible areas that could have initially prevented the lawsuit if they were in place. 

First, the ruling has finally laid to rest the confusion over which regulatory body is in the right position to regulate the crypto market. Before now, the United States Securities and Exchange Commission (SEC)  and the Commodity Futures Trading Commission (CFTC) were at loggerheads over the regulation of cryptocurrency. Meanwhile, the SEC has always been at the forefront but since the ruling has failed to classify XRP as a security, its role in the industry will be reduced. 

Possibly, a progressive dialogue will surface between regulators and prominent stakeholders in the industry. The discussion will focus on the way forward regarding the future of the crypto market in the United States. Likewise, the XRP judgment also underlines the immediate need for a detailed regulatory standard for cryptocurrency. 


Aside from the legal and regulatory implications of the XRP judgment, the crypto landscape will enjoy new attention from investors. The ruling will boost the confidence of investors in the industry. Consequently, encouraging them to invest in the industry. The price rally of XRP shortly after the ruling became public should serve as insight into what will happen as investors’ confidence increases. 

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Olaleye Komolafe
Olaleye Komolafe
Olaleye is a professional reporter with vast experience in web3, cryptocurrencies, and NFT journalism. He enjoys writing about the evolving metaverse sphere and the prevalence in the crypto sphere. Notably, some of his contents have been published in numerous international publications. Away from the crypto world, Olaleye is a political scientist and a lover of football

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