In a significant legal victory for Ripple, the Southern District of New York has ruled that the company’s programmatic sales and other distributions of XRP did not constitute an offer and sale of investment contracts.
However, the court found that Ripple’s institutional sales of XRP did constitute an unregistered offer and sale of investment contracts in violation of Section 5 of the Securities Act.
According to analyst Adam Cochran, the ruling is mostly excellent news for Ripple and XRP, providing greater regulatory clarity and paving the way for increased cryptocurrency adoption.
The court found that sales to users via exchanges “were fine” if they were conducted through order books and not ICO/IEO/Launchpad-like platforms. Other activities, such as bounties, investments in others using XRP, grants using XRP, and transfers to executives in XRP, were also not considered securities.
XRP has long been considered one of the more centralized foundations in cryptocurrency, with a key figurehead and standard sales via exchanges. According to Cochran, the court’s ruling suggests that if XRP is not a security, then neither are Bitcoin or Ethereum.
Furthermore, Cochran believes The ruling is also a win for exchanges, as it suggests that all selling will flow through public order books again, with no more billions in convertible funding rounds early on. This could make it easier for investors to trade XRP and other cryptocurrencies on regulated exchanges.
XRP Price Rises As Ripple Wins Legal Battle Against SEC
The recent ruling in favor of Ripple represents a significant legal victory, and the market has positively received the news. XRP’s price has notably increased since the ruling, with the cryptocurrency experiencing gains of over 33% in the hours following the announcement.
What’s more, Institutional investors have been cautious about investing in XRP due to the ongoing legal battle with the SEC, which has created uncertainty around the regulatory status of the cryptocurrency.
The recent ruling provides greater clarity and certainty, which could help to alleviate some of these concerns and make XRP a more attractive option for institutional investors.
As of the time of writing, XRP has reached a significant milestone by hitting the $0.6324 mark, which has not been achieved since May 2022. This new yearly high is a positive indication of the cryptocurrency’s continued uptrend.
The ADX, a technical indicator that measures the strength of a trend, is currently spiking to the upside, suggesting a potential continuation of XRP’s upward momentum.
XRP’s squeeze-bear momentum indicator also shows the beginning of a significant move to the upside, indicating that the cryptocurrency may be poised for further gains. These factors could be the perfect ingredients for XRP to reach the $1 mark.
Despite the cryptocurrency’s optimism, XRP faces two major resistance levels shortly. The first resistance wall is $0.7769, which could be the first obstacle to the $1 mark. The second, more challenging wall is the $0.8627 level, which has not been reached since the first quarter of 2022.
This surge in price marks a significant turnaround for XRP, which had been struggling in the wake of the SEC lawsuit. The ruling is likely to positively impact investor sentiment, as it provides greater clarity and certainty around the regulatory status of the token.
Featured image from Unsplash, chart from TradingView.com