Victory for Ripple, XRP Soars

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As a seasoned researcher with a keen interest in blockchain and cryptocurrencies, I’ve witnessed my fair share of twists and turns in this ever-evolving landscape. The recent ruling against Ripple by the Southern District of New York, while not a total win for them, certainly feels like a step towards clarity.

On Wednesday, District Judge Analisa Torres of the Southern District of New York ruled that Ripple must pay a fine of $125 million for violating securities laws and must cease such actions in the future. The ruling found that 1,278 institutional sales by Ripple were not compliant with securities regulations, leading to the financial penalty. This amount is lower than the original demand of $1.9 billion from the SEC for disgorgement, interest, and civil penalties. The decision was made in a federal court.

Based on Judge Torres’ ruling in July 2023, the decision has been made that Ripple’s direct sales of XRP to institutional clients breached federal securities laws. However, she determined that there were no such violations in Ripple’s automated sales to individual clients through exchanges.

The ruling concludes the Securities and Exchange Commission’s (SEC) legal action against Ripple, but experts predict that the agency may choose to file an appeal.

Although the SEC’s effort to challenge this specific issue in the case was not successful, the court’s imposition of an injunction against future violations suggests a judicial wariness about Ripple possibly overstepping legal boundaries with its “on-demand liquidity” services.

In his ruling, Judge Torres highlighted that there’s a significant chance, or “reasonable probability,” of Ripple potentially breaking securities laws again. Consequently, this likelihood justifies the imposition of an injunction on them. Furthermore, Ripple is obligated to submit a registration statement for any future sales of securities they plan to make.

As a seasoned investor with years of experience in the financial markets, I have witnessed many twists and turns in the world of cryptocurrency. The recent development regarding Ripple is particularly intriguing due to my personal interest in this digital asset. This latest news follows the SEC’s unsuccessful attempt for an interlocutory appeal last year and a settlement with Ripple executives, including CEO Brad Garlinghouse, on related charges.

Garlinghouse responded to the ruling on X, saying, “The SEC initially requested $2 billion, but the court reduced their demand by approximately 94%, acknowledging that they had overstepped. We acknowledge the court’s decision and now have a clear path to expand our company. This is a triumph for Ripple, the industry, and the legal system. The SEC’s resistance against the entire XRP community has been diminished.”

HUGE win for Ripple

As a legal analyst, I find myself in agreement with Fred Rispoli’s assessment on the recent court decision regarding Ripple. While I was taken aback by the $125 million fine imposed, it’s important to note that this setback is more than offset by the significant surge in the value of XRP over the past five minutes. Here are the key points from the ruling:

    Current sales of XRP post-Complaint do not necessarily violate federal law. That battle is for another day (meaning a new lawsuit).
    I called that the judge would essentially grant an injunction that Ripple could not violate federal law. That’s where we leave it.
    SEC lost bigly where the Court refused to grant a “categorical” injunction on all Institutional Sales, especially on ODL.
    No disgorgement. Huge loss for SEC here.
    Ripple did not recklessly disregard regulatory requirements.
    Post-July 13 conduct by Ripple re: Institutional Sales did not rise to level of blame-shifting.
    I called Netburn expert rule was never going to be decided in a way favorable to Ripple.
    Today starts the 60-day countdown to the deadline to file an appeal.”

James Seyffart, Bloomberg analyst, stated on x that “While the SEC may see a $125 million penalty as a victory, I view it as a triumph for Ripple. In my opinion, this is a loss for the SEC’s approach of enforcing regulations.”

Following the judgement, XRP’s price saw an immediate jump of 20%.

 

Stablecoin Approval

Ripple, known for its significant role in the blockchain sector and its association with the XRP Ledger, announced on Friday that it has begun testing its stablecoin, Ripple USD, on both the Ethereum mainnet and the XRP Ledger. According to a company blog post, Ripple USD is currently in beta testing, undergoing rigorous evaluation by enterprise partners to ensure the stablecoin adheres to the highest standards of security, efficiency, and reliability before its broader release, pending regulatory approvals.
The progression in the stablecoin market is traceable to Ripple’s announcement in April about joining this sector, currently estimated to be worth around $160 billion. This segment holds significant importance within the cryptocurrency economy, being instrumental for trading and payment transactions. At present, it’s largely controlled by prominent players such as Tether’s USDT and Circle’s USDC. Financial analysts at Broker Bernstein foresee this market potentially growing to a staggering $2.8 trillion by the year 2028.
Ripple’s stablecoin, known as RLUSD or Ripple USD, is backed by various short-term U.S. government securities, dollar accounts, and similar financial instruments. For your peace of mind and confidence, an external auditing firm will verify the reserves that secure this digital currency. Ripple pledges to regularly release monthly reports confirming this audit process.
Additionally, Ripple mentioned their intention to provide both RLUSD and XRP for international transaction services to customers. Notably, the stablecoin (RLUSD) isn’t available for trading at this moment due to pending regulatory clearance.

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2024-08-12 02:48