The verdict is made. After years of litigation, Ripple was able to win a key victory over the Securities and Exchange Commission. A US court ruled: XRP is not a security, at least not when traded on crypto exchanges, but institutional funding rounds are. The crypto industry is cheering. In the past few months, she had repeatedly become the target of legal attacks by the SEC.
Hagen Weiss, legal counsel at the commercial law firm Dentons, told that it was a “very good decision”, especially with regard to the court’s line of argument. The verdict clearly differentiates between the actual token and the associated activity. Consequently, the court only classified the token sale for institutional customers as a securities offer, but not trading on secondary markets such as Coinbase, Binance or Kraken.
Ripple: A judgment with a signal effect?
The crypto space sees the decision as a clear victory in the battle with US regulators. The Ripple litigation was seen by many observers and experts as a blueprint for the regulatory future of the crypto industry in the US. The verdict should have an impact on the entire industry, agrees Weiss. “The USA may now become more attractive again for capital market-oriented crypto companies,” says the lawyer. However, it is also conceivable that other companies such as Coinbase or Binance, which are also in litigation with the SEC, will adapt their strategy in order to hope for similar success.
However, it remains questionable whether the SEC will simply accept this defeat or whether it will seek the next higher authority. Shortly after the verdict, the authority left the option open. The decision is being reviewed, according to an official statement. Hagen Weiss considers an appeal to be quite possible, “precisely because of the precedent effect”. However, the chances are not necessarily favorable, the lawyer continues. Also because the court found a lack of official instructions and rules on the part of the SEC.