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In a landmark victory for Ripple Labs on Thursday, the federal judge delivering a summary judgement in the SEC vs Ripple case ruled that the crypto solution provider did not violate federal securities law by offering customers its native XRP token on public exchanges and through algorithms. New York Southern District Court Judge Analisa Torres upheld that the XRP sales on exchanges were “blind bid/ask transactions” and didn’t constitute offers of securities since buyers did not have reasonable expectations of profit.
XRP market upbeat on judge's mixed ruling in Ripple vs SEC case
However, the ruling doesn’t mark the end of the dispute which began at the end of 2020, as it preserved the SEC's jurisdiction over institutional fundraising. As such, institutional purchasers (from Ripple) could be pursued through class-action litigation as the judge declared the latter a violation of securities laws.
Though the regulator secured a partial win, market participants welcomed the overall favorable outcome as a huge win for the digital assets industry, with the prices of many cryptocurrencies soaring. Commentators remarking on Thursday's ruling noted that the judgement, albeit specific to the case involving Ripple, could have more consequences for the broader industry, which has been closely tracking the case's developments in the last three years.
Ripple's associated token XRP printed the largest daily green candle ahead of Friday, rising above $0.75 from $0.50, where it was trading prior to the judge's statement. CoinMarketCap data shows that the XRP/USD is hovering at $0.79, up 67% in the last 24 hours.
Overall, XRP’s market capital rose sharply above $40 billion moving the token into fourth place ahead of Binance’s BNB token.
Coinglass data shows that the volatile market action inspired a liquidation volume of more than $52 million for the XRP symbol.
XRP accounts for the second largest liquidation volume in the last 24 hours $61.80 million behind Bitcoin's $67.18 million.
To learn more about Ripple, check out our Investing in Ripple guide.
Ripple's summary judgement propels Bitcoin and altcoins
Reacting to the news, Ripple’s Chief Legal Officer Stuart Alderoty hailed the ruling as a victory for the San Francisco-based financial tech company.
“A huge win today – as a matter of law – XRP is not a security. Also, a matter of law – sales on exchanges are not securities. Sales by executives are not securities. Other XRP distributions – to developers, to charities, to employees are not securities. The only thing the Court found constitutes an investment contract is past direct XRP sales to institutional clients. There will be further court proceedings only on these institutional sales per the Court’s order,” Alderoty wrote in a tweet.
Bitcoin charted an impressive uptrend towards $32,000 late Thursday but fell short near the range, recording a one-year high of $31,800. Meanwhile, Ethereum broke past the $2,000 mark after months-long struggle to overcome the height.
Other altcoins joined the rally, with almost all the top 10 non-stablecoin cryptocurrencies by market capital, recording gains of 6% and 30% in the last 24 hours. Cardano (ADA), Solana (SOL) and Polygon (MATIC) were spotted up 23.74%, 32.65%, and 18.80% in the past 24 hours respectively.
To learn more about Ethereum, check out our Investing in Ethereum guide.
Exchange and public mining company stocks rally
Coinbase and other exchange platforms reacted to the news, notifying users of plans to relist the XRP token on their avenues. Gemini, on the other hand, said it is exploring listing the token for spot and derivatives trading.
“Trading is anticipated to begin later today, if liquidity conditions are met. Once sufficient supply of this asset is established trading on our XRP-USD, XRP-USDT and XRP-EUR trading pairs will launch in phases. Support for XRP may be restricted in some supported jurisdictions,” Coinbase said in a Thursday tweet.
Kraken on its part enabled support for depositing and trading the token to its US customers, as did Bitstamp and Crypto.com.
Coinbase's announcement to allow trading of the token on its platform bode well for COIN stock, which closed the day up 24% at $107. Markedly, COIN's breach above $100 is the first since May 2022. Other publicly-traded companies benefited from the ruling, including MicroStrategy (MSTR), Marathon Digital (MARA), Riot Platforms (RIOT) and Hut 8 (HUT), which posted double-digit gains on Thursday.
To learn more about Bitcoin, check out our Investing in Bitcoin guide.