Since the moment blockchain company Ripple secured a favorable ruling in the legal standoff against the United States Securities and Exchange Commission (SEC), which threatens the regulator’s push in the cryptocurrency industry, reactions have been pouring in, including from the SEC itself.
In short, judge Analisa Torres concluded on July 13 that XRP was not a security, that its sales on cryptocurrency exchanges or by executives do not constitute securities sales, and that other XRP distributions, including to charities, developers, or employees, likewise do not belong in the securities classification.
Concerns around ruling
On the other hand, the court did find that past direct XRP sales to institutional clients do, in fact, constitute an investment contract, and the company’s chief legal officer (CLO) Stuart Alderoty said that further proceedings would take place on these institutional sales in accordance with the court order.
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However, pro-XRP lawyer Bill Morgan has expressed concerns with the latter part of the judgment, particularly where Judge Torres grouped the sales to on-demand liquidity (ODL) customers with institutional sales, as he argued that sales to ODL customers were very different and wondered how this ruling would affect Ripple’s ODL product and business.
“Much of her reasoning generally about institutional sales doesn’t apply to sales to ODL customers who simply don’t expect profits from investing in or speculating on XRP. They don’t hold it long enough..seconds. Remember, this is now all current XRP sales of Ripple,” he said.
SEC’s ‘pathetic’ reaction
Following the news of the ruling, the SEC told Fox Business, in a statement that Alderoty referred to as “pathetic,” that the watchdog was content with the ruling concerning institutional customers but without mentioning the part that is Ripple’s favor, as shared by journalist Eleanor Terret:
“We are pleased that the court found that XRP tokens were offered and sold by Ripple as investment contracts in violation of the securities laws in certain circumstances.”
In the words of the SEC’s spokesperson, “the court agreed with the SEC that the Howey test governs the securities analysis of crypto transactions and rejected Ripple’s made-up test as to what constitutes an investment contract, instead emphasizing that Howey and subsequent cases have held that a variety of tangible and intangible assets can serve as the subject of an investment contract.”
“Further, the court rejected Ripple’s fair notice argument, noting that the Howey test is clear and that claiming ignorance is not a defense to violating the securities laws. We’ll continue to review the decision.”
Exchanges relist XRP
Meanwhile, Paul Grewal, the CLO of crypto trading platform Coinbase, which had earlier delisted XRP, has said that his company has carefully reviewed the court decision and decided to relist the XRP token and again enable its trading on the XRP network.
Additionally, as the co-founder of cryptocurrency platform Gemini, Tyler Winklevoss, noted, “the Ripple ruling today decimates the SEC’s case against Coinbase,” adding a message to the current SEC chief that said: “Have fun with that one, Gary Gensler.”
At the same time, the US branch of Binance, Binance.US, has also decided to bring back XRP to its platform in the light of the recent ruling, enabling deposits and announcing that trading on the XRP/USDT pair will begin on July 14, at 9 a.m. Eastern Time (ET).
XRP price and activity soar
Elsewhere, XRP had pumped more than 87% in just three hours upon the news of Ripple’s victory, riding on the huge wave of whale and other transactions, with its social dominance shooting up to 7.4% of all discussions online, according to the recent data from the crypto analytics platform Santiment.
Meanwhile, XRP was at press time trading at the price of $0.783, recording a massive increase of 65.68% on the day, gaining 68.64% in the last week, as well as growing 54.21% on its monthly chart, as per the latest information retrieved by Finbold on July 14.
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