Southern District of New York strengthens Ripple: no securities, but violations of Securities Act

Southern District of New York strengthens Ripple: no securities, but violations of Securities Act

southern district of New York strengthens Ripple: no securities, but violations of the Securities Act

In an important legal victory for Ripple, the southern district of New York has decided that the programmatic sales and other XRP distributions of the company do not represent and sell investment contracts. This judgment brings clarity and security for Ripple and paves the way for an increased introduction of cryptocurrencies.

However, the court has noticed that the institutional sales of XRP were an unregistered offer and a sale of investment contracts and thus violated Section 5 of the Securities Act. This means that Ripple could expect fines or have to make changes to its business practices.

Adam Cochran, analyst, mostly sees the judgment as a positive news for Ripple and XRP. It ensures more regulatory clarity and paves the way for an increased introduction of cryptocurrencies. The court also found that sales to users are "okay" through stock exchanges as long as they were handled by order books and not via ICO/IEO/launchpad-like platforms. Other activities such as head money, investments in others with XRP, grants with XRP and transfers to managers in XRP were also not considered securities.

The court's decision that XRP is not a security indicates that this also applies to Bitcoin and Ethereum. It strengthens the position of cryptocurrencies as an independent asset class.

The judgment could also be a profit for the stock exchanges, as it indicates that all sales will flow again via the public order books. This could make it easier for investors to act XRP and other cryptocurrencies on regulated stock exchanges.

The market has received the judgment positively. The price of XRP has increased significantly since the announcement of the judgment. In the hours after the announcement, the cryptocurrency recorded an increase of over 33 %. Institutional investors were careful when investing in XRP due to the continued legal dispute with the SEC. The judgment ensures more clarity and security and could help to clear some of these concerns and to make XRP a more attractive option for institutional investors.

At the time of writing this article, XRP reached the $ 0.6324 mark, which is an important milestone and has not been reached since May 2022. The technical indicator adx currently shows an upward trend, which indicates a possible continuation of the upward trend of XRP. The Squeeze-Bear momentum indicator of XRP also shows the beginning of a significant upward movement, which indicates that the cryptocurrency may be ready for further profits. These factors could be the perfect ingredients that XRP reaches the $ 1

However, XRP is still facing two large levels of resistance. The first resistance wall is $ 0.7769, which could be the first obstacle for the $ 1 brand. The second, more demanding wall is the $ 0.8627 mark, which has not been reached since the first quarter of 2022.

The price increase of XRP marks a clear trend reversal for cryptocurrency, which had problems with the Sec because of the legal dispute. The judgment brings clarity and security over the regulatory status of the token and could strengthen the trust of investors.

Image source: Unsplash, chart of tradingview.com