The murky legal landscape surrounding cryptocurrencies in the U.S., particularly XRP, is finally getting a dose of much-needed clarity. Two recent court decisions have significantly impacted the ongoing lawsuit between the U.S. Securities and Exchange Commission (SEC) and Ripple, with broader implications for industry regulations.
A Pivotal Victory On Secondary Sales
In a major win for the crypto industry, District Judge Amy Berman Jackson has bolstered the legal precedent set by Judge Analisa Torres in the SEC vs. Ripple case. Judge Jackson’s ruling centered on the classification of Binance’s BNB token in the SEC vs. Binance case. The SEC argued that secondary sales of BNB by users on crypto exchanges constituted unregistered securities offerings. However, Judge Jackson disagreed, dismissing the SEC’s claim (decision shared on [date] by Fox Business journalist Eleanor Terrett).
This aligns with Judge Torres’ previous decision in the Ripple case. Judge Torres determined that XRP sales directly from Ripple to institutional buyers and subsequent secondary market sales did not meet the criteria of investment contracts under the Howey Test, a legal framework used to determine if an asset qualifies as a security.
Judge Jackson’s decision in the Binance case strengthens Judge Torres’ reasoning and sets a crucial precedent for ongoing crypto-related lawsuits in the U.S. Companies like Coinbase, Kraken, and Consensys can leverage this precedent in their ongoing legal battles with the SEC regarding their token offerings.
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Ripple and XRP See a Silver Lining
These recent rulings have positive implications for Ripple and XRP holders. While many expect the SEC to appeal Judge Torres’ ruling after the lawsuit concludes, the SEC’s ability to argue against her decision on secondary sales of XRP is now significantly weakened. Additionally, the favorable ruling in the Coinbase case adds weight to the idea that secondary crypto sales generally don’t constitute securities offerings.
This has caused a cautious rise in XRP’s price, climbing 0.2% over the past 24 hours to $0.4734. Continued momentum could see XRP regain the $0.5 level soon.
A Brighter Future for U.S. Crypto
The recent court decisions provide much-needed clarity for the burgeoning cryptocurrency industry in the U.S. The legal classification of crypto assets, particularly regarding secondary sales, is becoming increasingly well-defined. These rulings pave the way for a more predictable regulatory environment, potentially attracting further investment in the crypto space.
With Ripple making significant strides globally in XRP and blockchain technology adoption, proper regulation could open up the U.S. market for significant blockchain innovation.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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