Home News Cryptocurrencies Soar as Judge Rules XRP Not a Security

Cryptocurrencies Soar as Judge Rules XRP Not a Security

510
0

Cryptocurrencies experienced a significant surge on Thursday, driven by the impressive rally of XRP, the digital asset associated with Ripple Labs. A federal judge ruled that XRP is not considered a security when sold to retail investors on digital-asset exchanges, fueling the double-digit percentage gain of the crypto.

Based on CoinDesk data, XRP has soared over 80% on Thursday, reaching approximately $0.85, its highest level since December of 2021. U.S. District Judge Analisa Torres clarified that while Ripple’s sales to sophisticated institutional investors could be seen as an unregistered sale of investment contracts, violating federal law, this ruling represented only a partial victory for those who argued that XRP should not be classified as a security.

Ripple’s CEO, Brad Garlinghouse, has consistently maintained that XRP, created for cross-border payments, should not be considered a security. This ruling sets a precedent, as Jeff Dorman, Chief Investment Officer at Arca, stated on Twitter that it opens up the possibility for other tokens besides Bitcoin to be deemed “not a security.”

The impact of this ruling extends beyond XRP, potentially benefiting other cryptocurrencies. Ether prices (ETHUSD) rose approximately 5.7% to reach around $2,011, the highest level observed since May. Additionally, Solana (SOLUSD) experienced an 18% surge on Thursday, while Polygon (MATICUSD) saw its values rally by 20%. Bitcoin (BTCUSD) prices also increased by 3% over the past 24 hours.

The classification of cryptocurrencies as “securities” plays a crucial role in the regulatory strategy of the Securities and Exchange Commission (SEC). Securities that are sold to the public must be registered with the SEC, which necessitates providing investors with regular financial statements and disclosing business operations and potential risks.

SEC Chairman Gary Gensler has consistently maintained that most cryptocurrencies should be classified as securities and fall under the jurisdiction of the agency. However, Bitcoin, as the original and largest cryptocurrency, is the only digital asset recognized by the chairman as a commodity rather than a security.

Conclusion

With the recent ruling determining XRP as not being a security in retail sales, cryptocurrencies are experiencing a surge in value. This victory for Ripple may have significant implications for other tokens and showcases the ongoing debate surrounding the classification of digital assets by financial regulatory bodies like the SEC. As this story continues to unfold, market participants eagerly anticipate further developments in the crypto space.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

65  +    =  66