Lawyers and Crypto Twitter React: Ripple Ruling Considered a Resounding Victory for the Industry

**Ruling in Ripple vs. SEC Case: Implications for the Crypto Industry**

**Judge’s Ruling**

A New York district judge recently issued a ruling in a court case between the Securities and Exchange Commission (SEC) and crypto firm Ripple. The case revolved around whether Ripple’s sales of its cryptocurrency, XRP, represented the offering of an unregistered security. The ruling was complex and yielded a split decision, with merits found for both the SEC and Ripple.

**Implications for the Crypto Industry**

Following the ruling, the crypto industry celebrated what they deemed a victory. Judge Analisa Torres determined that Ripple’s sales of XRP to institutional investors, such as hedge funds, were considered investment contracts. However, programmatic sales on open markets, like exchanges, were not. While the SEC is expected to challenge the decision, and certain parts of the case are yet to go to trial, the implications are significant. Many interpreted the ruling to mean that secondary sales of cryptocurrencies are not securities. This interpretation could potentially undermine the SEC’s lawsuits against popular exchanges like Coinbase and Binance.

**Viewpoints from Legal Experts**

Legal experts, including Christian Schultz, a former SEC assistant chief litigation counsel, saw the ruling as a win for the crypto industry. However, Schultz also anticipated that the industry would find alternative methods to avoid the path of institutional sales outlined by the SEC. Other lawyers, like Arthur Jakoby, co-chair of securities litigation and enforcement at the law firm Herrick, believe that if the ruling is upheld on appeal, it could significantly narrow the SEC’s jurisdiction over the crypto market.

**XRP as a Token**

One aspect of the ruling that garnered attention was Judge Torres’s assertion that XRP itself is not a token, but its sale can be considered one under certain circumstances. This distinction has previously caused confusion regarding whether cryptocurrency tokens are considered securities.

**Uncertainty Around the Ruling**

Although the ruling was seen as a victory by many in the crypto industry, concerns were raised about certain aspects of the decision. Dr. Jiaying Jiang, a law professor, pointed out that there is still room for argument regarding programmatic sales and the specificity of XRP’s economic context. This raises the question of whether the ruling will apply to other cryptocurrencies and whether secondary sales not directly from an issuer will be addressed in future cases.

**SEC’s Response**

The SEC responded to the ruling, expressing satisfaction with the court’s finding that XRP tokens were offered and sold by Ripple as investment contracts in violation of securities laws under certain circumstances.

**Caution from Crypto Twitter**

While many celebrated the ruling, some members of Crypto Twitter expressed caution and skepticism. Some pointed out the dilemma created by the argument that secondary sales do not constitute offering a security, as it would require disclosure for altcoins sold to institutional investors but not to retail investors. Others, like Justin Slaughter, policy director of crypto VC firm Paradigm, argued that leaving digital asset regulation to the courts instead of Congress can lead to confusion and emphasized the need for legislative action.

**Implications for SEC Chair Gary Gensler**

The ruling carries significant implications for SEC Chair Gary Gensler, who has been a target of criticism within the crypto industry. With this ruling representing a major loss for the SEC on the issue of crypto securities, individuals previously targeted by the agency expressed their satisfaction.

**Immediate Impact on the Crypto Industry**

As exchanges like Coinbase and Kraken raced to relist XRP following the ruling, the token experienced a surge in value, reaching a high of 75%. This immediate impact demonstrated the significance of the ruling for the crypto industry.


In conclusion, the recent ruling in the Ripple vs. SEC case has generated significant discussion and implications for the crypto industry. While the ruling was mostly seen as a win for the industry, there are still points of uncertainty and potential for further legal battles. The ruling’s effects on the SEC’s jurisdiction, the classification of tokens, and the need for legislative action are important considerations moving forward.

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