Just today, a New York Judge has ruled that Ripple’s sale of its native token $XRP does not constitute an offer of investment contracts, and that Ripple is not a security.
This landmark decision comes after years of legal back and forth between Ripple and the SEC after the commission had alleged Ripple for conducted an unregistered securities offering by selling XRP.
According to Twitter user Adam Cochran, Ripple not being classified as security was due to the programmatic sale on exchanges, which did not meet the third prong of the Howey Test.
He continues this by saying “sales to users via exchanges was fine, as long as it was through orderbook and not ICO/IEO/Launchpad like things”
However, it should be noted that Ripple’s institutional sales were in clear violation of Section 5 of the Securities Act and that the court constituted them as “unregistered securities offerings”.
At the time of writing, the judge has granted summary judgement motions from both sides, meaning that the case will still be open to another trail in the future.
In light of Ripple’s win, it’s native token XRP has surged almost 20%, reaching a new Year To Date high of $0.60 on some exchanges.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
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