Ripple’s $XRP dodged the “security” label, as the judges in SEC v Ripple ⚖️ issued their summary ruling.
Here are the main lines of the ruling and what they could mean for the larger crypto industry.
Yesterday, the crypto space scored a very important win.
$XRP is up 70% 🚀, altcoins rising too, but nuances remain. These are the main lines worth noting:
📌 1. “XRP, as a digital token, is not and of itself a “contract, transaction, or scheme” that embodies the Howey requirements of an investment contract
➡️ If the token of one of the most centralized crypto foundations is NOT a security, most other cryptos sold on exchanges are probably neither
➡️ …which could mean that cryptocurrencies are beyond the SEC’s jurisdiction
📌 2. Programmatic sales of $XRP do not constitute the offer and sale of investment contracts because “a programmatic buyer stood in the same shoes as a secondary market purchaser who did not know to whom or what it was paying its money”.
➡️ Selling crypto on exchanges is fine, as their users can be unaware of the links between the token and its issuer’s performance
➡️ …which could mean that crypto exchanges are beyond the SEC’s jurisdiction
📌 3. “Other” sales of $XRP do not constitute the offer and sale of investment contracts
➡️ Crypto given for free (bounties, investments, grants, and transfers to execs) are not concerned by the securities law as the receivers never put up any investment
📌 4. Institutional sales of $XRP constitute the unregistered offer and sale of investment contracts, as these buyers are “sophisticated” enough to understand the links between the token and its issuer’s performance
➡️ ICO, Launchpad, OTC, and other centralized forms of crypto fundraising are likely to be considered securities and must comply with the related law
Following the news, Coinbase, Binance US, and Kraken have resumed $XRP trading.
Congressman Tom Emmer proposed to inscribe into law the ruling about crypto not being securities.
📃 At the same time, the SEC released a statement, praising the last point and totally ignoring the first three 🤷♀️
To sum up: distribute your crypto via protocol, avoid institutional private rounds, and you should be OK even in the US 😉