A US judge declared Ripple Labs did not violate federal securities law when it sold its XRP crypto token on public exchanges, in what is being seen as a major legal triumph for the cryptocurrency industry over the US Securities and Exchange Commission (SEC).
The ruling last week marked the first favourable outcome for a crypto company facing a case brought by the SEC.
The federal judge of the District Court for the Southern District of New York had reviewed the SEC’s years-long case against Ripple Labs and determined that it fell short in many respects.
Ripple CEO Brad Garlinghouse hailed the ruling as a significant triumph not only for Ripple but also for the overall cryptocurrency industry in the US.
SEC satisfied with crypto ruling
The SEC, however, achieved a partial victory as Judge Torres determined that Ripple’s sales of XRP – totalling $728.9 million – to hedge funds and other sophisticated buyers constituted unregistered securities sales.
Public sales on digital currency exchanges were deemed not to have violated securities laws.
The SEC spokesperson expressed satisfaction with the portion of the ruling, where the judge concluded that Ripple had indeed contravened federal securities law by directly selling XRP to institutional investors. The ruling may be subject to appeal once a final judgment is rendered, or if permitted by the judge before that.
Follow us on
