The cryptocurrency provider Ripple Labs has achieved a legal victory in its dispute with the US Securities and Exchange Commission (SEC). The US Federal Court for the Southern District of New York has ruled that Ripple’s token XRP does not qualify as a security as long as it is traded on public crypto exchanges such as Coinbase, Binance, and Kraken. As a result, Ripple is not required to comply with the SEC’s regulations and protective measures. The judge responsible for the case, Analisa Torres, stated that the Howey criteria for determining a security do not apply to XRP when it is traded programmatically and available to the general public. However, the Howey criteria would apply if XRP is traded institutionally and offered to individual buyers in a targeted manner.
Towards the end of 2020, the SEC accused Ripple Labs of deceiving investors by offering unregistered securities worth $1.3 billion. Torres has now dismissed the majority of this lawsuit, which was expected by experts. The crypto industry views this ruling as a significant victory and a precedent that will expand cryptocurrency trading in the US. Following the announcement of the verdict, the value of XRP rose by over 60%, reaching its highest level in over a year. However, it later fell by 8% and was traded at 73 cents. The SEC has stated that it will closely examine the verdict and has not ruled out appealing the decision.