The value of crypto altcoins increased in the aftermath of a legal decision by the Securities and Exchange Commission (SEC) in their long-term legal struggle against Ripple Labs. This verdict supplied some understanding on the numerous securities-associated uncertainties in the crypto space.
At 1 pm ET on Thursday, Ripple (XRP) was valued at approximately $0.60, experiencing an increase of 3.3% in the last hour. This token saw an impressive surge of 32% from the day prior, a growth rate that exceeded all other leading crypto assets in terms of market capitalization.
During a period of time, Bitcoin (BTC) decreased by 0.4%, however, ether (ETH) experienced an increase of 1.4%.
CoinGecko data has revealed that the total market capitalization of the crypto industry has experienced a 2.4% rise to a total of $1.26 trillion within the last 24 hours.
In 2020, the SEC put forward the claim that Ripple Labs and two of its executives had raised over $1.3 billion during 2013 by selling XRP without registering it as a security.
On Thursday, a judicial decision was rendered stating that the provision of institutional sales was the only offer and sale of investment contracts. The court refuted Ripple’s position that a physical agreement must be present to be considered an investment contract, which they called the “essential ingredient” defense.
In December 2020, Brad Garlinghouse, Ripple’s CEO, declared that they were acting in accordance with the law and would be remembered in the future for it. He thanked everyone who worked with them to achieve the decision, one that was beneficial to all crypto businesses operating in the US. He added that there were still more developments to come.
Adam Cochran of Cinneamhain Ventures declared the judgement “an unexpectedly large success for XRP” in a tweet on Thursday. He also stated that “it is largely VERY beneficial for all other digital currencies.”
CoinGecko data as of 1 pm ET showed that the last hour had seen Solana (SOL) and Cardano (ADA) increase by 3.3% and 1.2%, respectively, which appears to corroborate Cochran’s prediction.
Investigating the trade volume of digital assets, it is evident that South Korea has seen more XRP being exchanged than Ethereum in the course of this year.
The court decision declared that most people who acquired XRP from virtual currency exchanges did not actually contribute their funds to Ripple.
The judge stated that a programmatic buyer was in the same situation as a secondary market purchaser who was unaware of whom or what they were paying the money to, even though the institutional buyer acquired directly from Ripple due to an agreement.
The Howey Test’s third prong was not met by the programmatic selling of tokens on exchanges. However, it was acceptable to distribute tokens to users via exchanges, as long as it was done through an orderbook and not through an ICO/IEO/Launchpad system. pic.twitter.com/MQjVKVhMP8
Cochran stated in a different tweet that XRP is one of the more centralized bases with an influential figurehead who has sales through exchanges and official distribution schemes. He further asserted that, if XRP isn’t considered a security, then almost nothing that is sold via exchanges would be.
A single day saw the SEC initiating legal action against two crypto exchanges, Binance and Coinbase, for purported violations of securities laws. This is just the latest episode in the SEC’s ongoing tussle with the cryptocurrency industry.
Chris Perkins, president of CoinFund, stated that, without laws tailored to foster responsible development of the cryptocurrency industry, it will be up to the courts to provide the guidance that entrepreneurs need to work without fear of repercussions. He further commented that the recent ruling on XRP is a positive step towards achieving this clarity, and that his organization will be keeping a close eye on other cases making their way through the legal system.
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