A US court has ruled that the cryptocurrency “Ripple” (XRP) is not equivalent to securities in all cases and thus is not subject to securities supervisors and regulations, reports CNBC.
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The court ruled that trading coins on stock exchanges was not comparable to trading stocks because there was no promise that the value of the coin would increase due to the work of its creators, as would be the case with stocks, where the company’s actions can directly raise or lower the value of the security.
The good news has boosted the price of the cryptocurrency significantly.
According to Coin Metrics, the price of Ripple rose by 71% to about 80 US cents per coin. The news gave hope to cryptocurrency investors who breathed a sigh of relief that other coins could not be considered securities after all.
Litecoin and Solana jumped 18%, while Cardano rose 20.31%. The value of “Bitcoin” and “Ethereum” increased by more than 4% and 6%, respectively.
The court decision is the latest development in a three-year battle between Ripple and the US Securities and Exchange Commission (SEC). In 2020, the SEC sued Ripple for violating US securities laws by selling Ripple without prior registration with the agency.
However, as Reuters writes, the court’s decision is complicated because it consists of several parts. Namely, the court also partially satisfied the SEC’s complaint. It was recognized that, while the trading of cryptocurrencies on digital exchanges does not correspond to the trading of securities, the sale of that particular cryptocurrency to financial institutions and professional investors is considered illegal securities trading.
At the same time, as cryptocurrency experts mention, this decision will significantly affect the SEC, which has begun to crack down on the world of cryptocurrencies in recent years, claiming that digital coins are securities and therefore subject to the same rules as stocks and bonds.
“Today’s decisions are a huge step forward for the industry,” Chris Martin, head of research at Amberdata, told CNBC. “By determining that XRP is not a security, we begin to gain clarity on what is a security and what is a commodity – the SEC will have to reconsider its tactics in several of its complaints, and I expect that this decision will affect several other cryptocurrencies as “non-securities”
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2023-07-14 07:13:33
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