The US Securities and Exchange Commission (SEC) suffered a defeat in its lawsuit against Ripple, the company behind the XRP token.
A federal judge in the Southern District of New York has ruled that Ripple's Scheduled Sales on exchanges and Other Distributions of XRP do not constitute an offering and sale of investment contracts and therefore do not violate Section 5 of the Securities Act.
However, the judge also found that Ripple's Corporate Sales of XRP, either directly or through intermediaries, constituted the unregistered offer and sale of investment contracts, thus violating Section 5 of the Securities Act.
As Bitcoinsistemi.com, we have conveyed this news to you.
Adam Cochran: “Very Good Development for All Altcoins”
Adam Cochran, a crypto analyst and partner at Cinneamhain Ventures, commented on the decision on Twitter. He said the decision was “very good for all altcoins for the most part, and a surprisingly big win for XRP.”
He said that if XRP, a prominent leader and one of the more centralized cryptocurrencies with official distribution programs, is not considered a security when sold on exchanges, “almost anything sold through exchanges is a security.”
“One of the Biggest Winners Cryptocurrency Exchanges”
Cochran also pointed out that exchanges are a big winner from the decision, as they will benefit from greater trading volume and liquidity if fund raises through institutional sales, over-the-counter deals and direct token sales are to be considered securities and have to go through public order books.
He warned, however, that the decision is not final and that the case could go to trial and appeal. He said it was not a “litigation outcome” but a “great victory and well thought out” decision.
*Not investment advice.