Ripple's Open Market Sales of XRP Cryptocurrency Aren't Securities, Court Rules in Landmark Decision

It was the court case the entire crypto industry was waiting for -- the showdown between the Securities and Exchange Commission and Ripple, an early digital assets firm behind the popular XRP token. From a report: The SEC alleged that sales of XRP constituted offering unregistered securities, while Ripple defended its $25 billion market, chiding the SEC's lack of clear guidance. On Thursday, a federal judge agreed partly in favor of both parties, with Ripple -- and the broader crypto industry -- appearing the early victor. The existential question for the U.S. crypto sector has been whether the thousands of tokens, from Bitcoin and Ether to Dogecoin and Pepecoin, are securities -- a financial term for an investment contract, which would require registration with the SEC. Crypto firms have argued that working with the agency is impossible under the current rules, while the SEC has accused nearly every token, with the clear exception of Bitcoin, as operating illegally. Ripple became an important trial balloon for the debate. In 2020, the SEC charged the company -- founded in 2012 with the promise of disrupting the global payments network through its proprietary token, XRP -- and two of its executives with raising over $1.3 billion through an unregistered digital asset securities offering. Unlike other subjects of SEC lawsuits, Ripple challenged the case, which has been litigated for the past three years in the Southern District of New York. The proceedings have enraptured the crypto industry, especially as the SEC has aggressively pursued other exchanges and projects for allegedly offering unregistered securities. A decision that found XRP was not a security could buoy other firms and weaken the SEC's torrent of lawsuits against the industry, while a total victory for the SEC would have proved disastrous and likely climbed its way to the Supreme Court.

Read more of this story at Slashdot.