Following a ruling from a judge in the Southern District of New York stating that Ripple‘s XRP token is “not necessarily a security on its face,” the price of XRP experienced a significant surge on Thursday. XRP’s price had risen by 71% to approximately 80 cents per coin. This news brought optimism to crypto investors, who were relieved by the possibility that other altcoins might also be exempt from being classified as securities.
Coinbase, previously having removed XRP from its trading platform, announced via Twitter on Thursday that it would reinstate trading of the asset. Coinbase‘s shares rose by over 24% following the ruling, reflecting optimism regarding the company’s own battle with the SEC.
This development marks the latest chapter in the three-year legal battle between Ripple and the SEC. It is worth noting that some of these findings could be subject to appeal and subsequent reversal, and the court will issue a separate order determining a trial date. In 2020, the SEC filed a lawsuit against Ripple, accusing the company of violating U.S. securities laws by selling XRP without registering it with the agency.
The ruling analyzed three categories of XRP sales: institutional sales, programmatic sales, and other distributions (e.g., employee compensation). The court determined that Ripple’s institutional sales to sophisticated individuals and entities constituted securities transactions and involved an investment of money. However, Ripple emerged victorious in the case of programmatic sales made through trading algorithms and other distributions.
