XRP (XRP-USD) is flying more than 60% higher today after Ripple Labs won early dismissal of some of the allegations levied against it related to selling unregistered securities. Other cryptocurrencies are tagging along higher in light of the news, including Bitcoin (BTC-USD) and Ethereum (ETH-USD). According to U.S. District Judge Analisa Torres, about half of Ripple’s sale of XRP “didn’t constitute an illegal securities offering.” Meanwhile, the other half — about $728 million — was considered an illegal sale of securities.
Still, many crypto experts believe that this is ultimately a win for the crypto industry. The price appreciation of XRP today reflects this as well.
“The judgment that institutional sales of XRP by Ripple constitute securities also has massive implications for the industry with several ICO’s now likely in the spotlight,” said Chris Martin, Head of Research at Amberdata. “For exchanges caught in ongoing SEC cases, it’s not clear how this judgment will affect them – they’ve only been involved in secondary sales for the most part. But as we can see with prices today, the market is very bullish on the judgments.”
XRP Crypto Rockets Higher Following Judge Decision
CNBC notes that the ruling is divided into three sections: institutional sales, programmatic sales and “other distributions,” which can refer to employee compensation. In the case of institutional sales — which are generally made to sophisticated entities with heightened industry knowledge — Torres stated that the sales should be considered securities transactions. Institutional investors can also include hedge funds or venture capital firms who purchased XRP directly from Ripple Labs.
However, the court also deemed that programmatic sales should not be classified as securities transactions. Other distributions were not deemed as securities transactions, either. Per the court document:
“Defendants’ motion for summary judgment is GRANTED as to the Programmatic Sales, the Other Distributions, and Larsen’s and Garlinghouse’s sales, and DENIED as to the Institutional Sales.”
The drama with Ripple and XRP first began in December 2020 after the U.S. Securities and Exchange Commission (charged Ripple Labs and executives Christian Larsen and Bradley Garlinghouse with conducting $1.3 billion in unregistered securities offerings. The commission argued that the defendants failed to register sales of XRP and did not “satisfy any exemption from registration.”)
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.