Key Takeaways:
- The SEC just dropped its lawsuit against Ripple, bringing an end to a protracted court battle.
- The court decision means that XRP is not classified as a security under current laws.
- This ruling is expected to shape the future regulatory environment for cryptocurrencies in the United States.
The U.S. Securities and Exchange Commission (SEC) has officially dismissed its lawsuit against Ripple, the company behind the XRP cryptocurrency, in what is being hailed as a watershed moment for the cryptocurrency industry. Friday’s announcement by Ripple Chief Executive Brad Garlinghouse finally ends a legal battle that started back in 2020 and had serious ramifications for many, including XRP holders, and the wider digital asset market.
XRP Goes Sky High After Ripple’s Legal Victory as Garlinghouse Declares “War on Crypto”
Garlinghouse took to X to share the news, stating, “The case is over. It’s over.” He called the lawsuit ‘the first major shot fired in the war on crypto,’ a war that has already allegedly cost XRP holders $15 billion in losses. However, he noted that Ripple has won key legal victories, clarifying that the sale of XRP is not considered the sale of a security under current law.
The news hit the market hard and fast. XRP was the major winner, rallying from $2.32 to $2.59 (approx 11.6%) in less than 30 minutes. The price saw some correction afterwards but the fact it spiked so high shows the excitement and optimism in the market. A notable increase in discussions and posts around Ripple was also noticed on X, indicating how much of a hot topic this has been.
This reflects the intense scrutiny and regulatory uncertainty in the crypto industry over recent years. The SEC’s original lawsuit against Ripple was a bombshell for the market, leaving many to wonder about the regulatory status of other cryptocurrencies and digital assets.
Was SEC Case Justifiable? SEC Conduct Highlighted
The case had its controversies, though. Garlinghouse noted that former SEC Chair Mary Jo White had publicly said the agency was “dead wrong” to bring the case. He also claimed that the SEC’s actions against Ripple under the leadership of Gary Gensler targeted the entire industry with the same reasoning. In addition, the SEC suffered judicial condemnation and sanctions for discovery abuses throughout the proceedings. The judge went so far as to admonish the agency for not demonstrating ‘faithful allegiance to the law,’ underlining the gravity of the problems identified.
This criticism underscores an increasing frustration among crypto proponents regarding the SEC’s stance toward regulation. Others argue thatbthe agency is being overly aggressive and inconsistent — and that is stifling innovation and pushing companies abroad. A notable example of regulatory pressure forcing companies to relocate is Binance, which had to exit China after a government-imposed ban. Similar regulatory uncertainty in the U.S. has driven some crypto firms to move operations overseas.
Related News: Ripple against SEC: Settlement Talks Almost Finished
Ripple’s Call for Clear Crypto Regulations
Garlinghouse hailed Ripple employees and the Chief Legal Officer of Ripple, Stu Alderody and the legal team, as well as the XRP community, in the statement. The lawsuit’s resolution comes as new leadership in both the executive and legislative branches are trying to lay down a regulatory framework for crypto assets in the U.S., Garlinghouse said, and having clear crypto regulations would help enable him to make the U.S. ‘the crypto capital of the world.’
The SEC moving to drop the lawsuit marks what could be a turning point in regulatory realities for cryptocurrencies in the U.S. As demand for guidance grows, Ripple’s victory could potentially signal a shift toward greater regulatory clarity, promoting innovation in the digital asset realm. This case could set a precedent, encouraging other companies to challenge the SEC and pushing the agency to adopt a more rational and balanced approach to crypto regulation.
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