The decision marks a significant turning point in a nearly three-year legal battle, setting a precedent that could shape the future of cryptocurrency regulation in the United States.
After Ripple’s crucial legal victory, CEO Brad Garlinghouse caught on Twitter to express his immense gratitude to his team and the result achieved.
Garlinghouse hailed the court’s decision as an “unequivocal victory for Ripple and for crypto in the United States,” indicating the far-reaching implications the ruling could have on the broader crypto landscape.
The verdict came nearly three years after the Securities and Exchange Commission (SEC) initiated legal action, marking a historic moment for Ripple and the entire US crypto industry.
The July 13 court ruling decisively determined that Ripple’s digital token, XRP, is not a security, a classification that would have subject it to stricter regulatory oversight.
The pivot not only absolves Ripple of the SEC allegations, but also sets a crucial precedent for the regulation of other crypto assets in the United States. This decisive victory against the SEC, the first of its kind in the industry, could influence the categorization of other cryptocurrencies, possibly mitigating future regulatory disputes.
This victory, although hard fought, could well become a turning point in the way cryptocurrencies are perceived and regulated in the country.
Alderoty criticizes the SEC’s misinterpretation of the law
Garlinghouse echoed the sentiments of Ripple’s chief legal officer, Stuart Alderoty, who criticized SEC Chairman Gary Gensler for allegedly misinterpreting the law and the Howey test.
The latter is a test created by the Supreme Court to determine whether certain transactions can be qualified as “investment contracts”.
Alderoty said, “The Court’s decision can now be used by others in the agency’s crosshairs. The SEC can no longer boast about its record in crypto – which was, until now, across the board with players who lacked the resources or conviction to fight back.”