<p>Yesterday, Judge Torres ruled that Ripple’s XRP token is not a security, in its ongoing case against the Securities and Exchanges Commission (SEC).</p><p>In what could go down as a landmark result, the positive ruling saw XRP’s value pump by 65%, with similar gains being felt throughout the crypto market.</p><p>However, despite the favorable announcement from the United States District Court, this is only a summary judgment, and the SEC is at liberty to appeal. Furthermore, Judge Analisa Torres’ ruling that XRP is not a security only applies to programmatic sales on <a href="https://cryptology.com/" rel="noopener noreferrer nofollow">cryptocurrency exchanges</a>.</p><h2 id="header-0">The SEC wasn&#39;t beaten completely</h2><p>Here the SEC scored a minor win. Federal Judge Torres ruled that although peer-to-peer sales of XRP did not fulfill the Howey Test criteria and therefore cannot be deemed a security, institutional sales did.</p><blockquote>“Defendants’ motion for summary judgment is GRANTED as to the Programmatic Sales, the other distributions, and Larsens’ and Garlinghouse’s sales, and DENIED as to the Institutional Sales.”</blockquote><p>This means when Ripple sold its <a href="https://cryptology.com/trading/XRP_USD" rel="noopener noreferrer nofollow">XRP token</a> directly to clients, it counted as a security. However in the context of users buying and selling to each other via digital asset exchanges, then XRP was not a security.</p><p>The lawsuit dates back to 2020, when the SEC sued Ripple Labs and its two chief executives Chris Larsen and Brad Garlinghouse, alleging the company was selling unregistered securities in the form of their XRP token.</p><h2 id="header-1">Ripple&#39;s win sets a positive precendent for crypto</h2><p>It’s an important result in what could shape up to be a landmark case not only for Ripple but for every crypto project that has their own token. And the ruling sets an interesting precedent for the SEC’s recent lawsuits against Binance and Coinbase, where they accuse the two industry leaders of operating “unregistered securities exchanges.”</p><p>With this summary judgment, at least it provides some regulatory clarity for the digital asset space. And for now, the crypto community can certainly celebrate a battle won. But the wider war wages on, and the next few months will be particularly formative for crypto, defining how the overall landscape looks and especially how DeFi interacts with traditional finance.</p>

Ripple wins historic victory against the SEC, but is the crypto community celebrating too soon?

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