This big victory for Ripple in its battle against the SEC can be seen as a reminder that existing regulatory frameworks may not always match the unique characteristics of cryptocurrencies and may need modification or improvement.
In a significant legal development, US Judge Analisa Torres pronounced the long-awaited summary judgment, ruling This XRP is not a security. Interestingly, this verdict not only breathed new life into the blockchain payment company’s future prospects, Ripple Laboratories Inc. but also triggered a remarkable increase in the price appreciation of the XRP coin.
The decision came after a lengthy legal battle that began in December 2020 between Ripple Labs and the United States Securities and Exchange Commission (SECOND). Recall that the SEC had alleged that XRP was considered an investment contract and should be subject to regulatory oversight.
However, in her current decision, Judge Torres disagreed, stating that XRP did not meet the criteria to be classified as a security under US law based on the provisions of the Howey test. Meanwhile, the decision, which was applauded by top leaders in the digital currency ecosystem, is seen as a significant victory for Ripple Labs and the entire cryptocurrency industry.
The classification of XRP as non-secure means that it can continue to operate without the strict regulations that govern securities. This decision brings clarity and certainty for other cryptocurrencies and sets a precedent for how similar tokens can be valued in the future.
This is especially needed as the regulator has turned its radar on other top digital currencies like gimbal (ADA), Solana (SOL) and Decentraland (MANA) which it claims are investment contracts in its recent crackdown on Binance and Coinbase Global Inc. (NASDAQ: CURRENCY)
XRP Price Goes Parabolic Amid Ripple Win Celebration
Following the decision, demand for XRP skyrocketed as investors and cryptocurrency enthusiasts rushed to buy, driving up its price and market capitalization. At the time of writing, XRP is trading at a spot price of $0.7938, up over 70% in the last 24 hours by data from CoinMarketCap.
Additionally, many industry experts believe that the decision gave a much-needed boost to overall market sentiment regarding cryptocurrencies.
The judge’s decision inspired confidence among investors who were previously hesitant to enter the cryptocurrency market due to regulatory uncertainties. With the clarification that XRP is not a security, potential investors are more inclined to consider the asset and other altcoins as viable investment options. In turn, increased investor confidence will lead to further growth and development within the cryptocurrency industry.
Likewise, the decision underscores the need for regulators to adapt and develop frameworks that can effectively govern the rapidly evolving cryptocurrency space. As more and more cryptocurrencies emerge in the market, it becomes essential for regulators to keep up with technological advancements and provide an enabling environment for innovation.
Undoubtedly, Justice Torres’ ruling is a reminder that existing regulatory frameworks may not always match the unique characteristics of cryptocurrencies and may need modification or improvement.
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Benjamin Godfrey is a blockchain enthusiast and journalist who loves to write about real-world applications of blockchain technology and innovations to drive mainstream acceptance and global uptake of emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain-based media and sites. Benjamin Godfrey is a sports and agriculture enthusiast.
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