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Court Rules XRP Sales Not Investment Contracts: How the SEC Case Could Reshape Crypto Landscape

News | July 13, 2023

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Image: Unsplash/Linus Nylund

In a landmark ruling in the SEC's case against Ripple Labs, the court has determined that the sale of XRP on exchanges does not constitute investment contracts.  Institutional sales of the tokens violated federal securities laws, but programmatic sales did not, a court ruled.

This decision could potentially reshape the regulatory landscape for cryptocurrencies in the U.S. Ripple Labs has been arguing that XRP is a medium of exchange, not a security, and this ruling appears to support their stance. The case, which alleges that Ripple conducted a $1.3 billion unregistered securities offering, is being closely watched by the crypto industry as it could set a precedent for future regulatory actions.

See:  SEC Wins LBRY Protocol Case: Is Every U.S. Crypto A Security?

  • The court has ruled that the sale of XRP on exchanges does not constitute investment contracts in the SEC's case against Ripple Labs.
  • Ripple Labs' argument that XRP is a medium of exchange, not a security, appears to be supported by this ruling.
  • The crypto industry is closely monitoring this case due to its potential to influence future regulations.
  • Crypto exhanges that had previously delisted XRP out of fear they were supporting an illegal security are relisting, such as this Canadian cryptocurrency exchange.

Gensler's Response:


NCFA Jan 2018 resize - Court Rules XRP Sales Not Investment Contracts:  How the SEC Case Could Reshape Crypto LandscapeThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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