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14-07-2023, 08:03 AM
By Jody Godoy
July 14, 20235:26 AM GMT+8Updated 3 hours ago
July 13 (Reuters) - Ripple Labs Inc did not violate federal securities law by selling its XRP token on public exchanges, a U.S. judge ruled on Thursday, a landmark legal victory for the cryptocurrency industry that sent the value of XRP soaring.
XRP was up 75% by late afternoon on Thursday
......
While the decision is specific to the facts of the case, it likely will provide ammunition for other crypto firms battling the SEC over whether their products fall under the regulator's jurisdiction.
An SEC spokesperson said the agency was pleased with part of the ruling in which the judge held that Ripple violated federal securities law by selling XRP directly to sophisticated investors.
......
The SEC had accused the company and its current and former chief executives of conducting a US$1.3 billion unregistered securities offering by selling XRP, which Ripple's founders created in 2012.
The case has been closely watched in the cryptocurrency industry, which disputes the SEC's assertion that the vast majority of crypto tokens are securities and subject to its strict investor protection rules. The agency has brought more than 100 enforcement crypto actions, claiming various tokens are securities, but many of those have ended in settlements.
In the few cases that have gone to court, judges have agreed with the SEC that the crypto assets at issue were securities, which unlike assets such as commodities are strictly regulated, must be registered with the SEC by their issuer and require detailed disclosures to inform investors of potential risks.
Torres ruled that Ripple's XRP sales on public cryptocurrency exchanges were not offers of securities under the law, because purchasers did not have a reasonable expectation of profit tied to Ripple's efforts.
Those sales were "blind bid/ask transactions," she said, in which buyers "could not have known if their payments of money went to Ripple, or any other seller of XRP."
Torres applied a U.S. Supreme Court case that said "an investment of money in a common enterprise with profits to come solely from the efforts of others," is a kind of security called an investment contract.
XRP sales on cryptocurrency platforms by Garlinghouse and co-founder and former CEO Chris Larsen, and other distributions including compensation to employees also did not involve securities, Torres ruled.
Better to read full report here especially if you are into cryptos: https://www.reuters.com/legal/us-judge-s...023-07-13/
July 14, 20235:26 AM GMT+8Updated 3 hours ago
July 13 (Reuters) - Ripple Labs Inc did not violate federal securities law by selling its XRP token on public exchanges, a U.S. judge ruled on Thursday, a landmark legal victory for the cryptocurrency industry that sent the value of XRP soaring.
XRP was up 75% by late afternoon on Thursday
......
While the decision is specific to the facts of the case, it likely will provide ammunition for other crypto firms battling the SEC over whether their products fall under the regulator's jurisdiction.
An SEC spokesperson said the agency was pleased with part of the ruling in which the judge held that Ripple violated federal securities law by selling XRP directly to sophisticated investors.
......
The SEC had accused the company and its current and former chief executives of conducting a US$1.3 billion unregistered securities offering by selling XRP, which Ripple's founders created in 2012.
The case has been closely watched in the cryptocurrency industry, which disputes the SEC's assertion that the vast majority of crypto tokens are securities and subject to its strict investor protection rules. The agency has brought more than 100 enforcement crypto actions, claiming various tokens are securities, but many of those have ended in settlements.
In the few cases that have gone to court, judges have agreed with the SEC that the crypto assets at issue were securities, which unlike assets such as commodities are strictly regulated, must be registered with the SEC by their issuer and require detailed disclosures to inform investors of potential risks.
Torres ruled that Ripple's XRP sales on public cryptocurrency exchanges were not offers of securities under the law, because purchasers did not have a reasonable expectation of profit tied to Ripple's efforts.
Those sales were "blind bid/ask transactions," she said, in which buyers "could not have known if their payments of money went to Ripple, or any other seller of XRP."
Torres applied a U.S. Supreme Court case that said "an investment of money in a common enterprise with profits to come solely from the efforts of others," is a kind of security called an investment contract.
XRP sales on cryptocurrency platforms by Garlinghouse and co-founder and former CEO Chris Larsen, and other distributions including compensation to employees also did not involve securities, Torres ruled.
Better to read full report here especially if you are into cryptos: https://www.reuters.com/legal/us-judge-s...023-07-13/
