Judge Rules XRP Is Not A Security. What Does It Mean For Other Crypto?
The crypto industry celebrated Ripple's partial win in court on Thursday, as a judge has ruled XRP (XRPUSD) is not a security. While many crypto proponents see this as a sign these sorts of assets will be allowed to flourish in the U.S., some legal experts point out that there is still much more regulatory clarity needed.
Bitcoin is a commodity, and that brings clarity on how it is regulated and by which agency. But that is not the case for most cryptocurrencies.
The U.S. Securities and Exchange Commission (SEC) contends that most cryptocurrency assets are securities and therefore must fall under the purview of securities laws.To that effect, the regulator has brought enforcement actions against issuers of the crypto tokens and as well as crypto exchanges such as Binance and Coinbase (COIN) that provided a platform to trade those tokens.
With the latest court ruling that XRP is not an investment contract itself, some members of the crypto industry are hopeful that the SEC will be forced to take a more hands off approach going forward. In addition to XRP, a number of other crypto assets that had previously been deemed securities, such as Solana (SOLUSD) and Polygon (MATIC), rallied on the news of the Ripple court order.
According to Morrison Cohen Partner Jason Gottlieb, Thursday's ruling is a departure from what had previously been found in the SEC's cases against Telegram and Kik, where all initial coin offerings were part of one investment scheme.Now, it's possible that crypto assets could be traded as «unrestricted securities» in a situation where they are sufficiently decentralized or not sold directly to retail. Gottlieb also says it would be difficult to conclude that staking rewards are securities in the context
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