In a landmark decision on 13 July 2023, Judge Analisa Torres of the U.S. District Court for the Southern District of New York delivered her verdict in the case between the SEC and Ripple Labs, which began in December 2020. The SEC had accused Ripple Labs and its senior executives, Bradley Garlinghouse and Christian A. Larsen, of unlawfully offering and selling securities in violation of the Securities Act of 1933.
Judge Torres’ ruling was nuanced and detailed. She agreed with the SEC on matters related to Ripple’s Institutional Sales but dismissed other claims. Specifically, she highlighted that XRP sales by Larsen and Garlinghouse were conducted anonymously on digital asset exchanges. Given this, she determined that these transactions did not meet certain criteria of the Howey test, a standard for identifying investment contracts. Furthermore, Judge Torres clarified the nature of the XRP token, emphasizing that it doesn’t inherently qualify as an investment contract under the Howey test. She also noted that secondary market sales of XRP were not offers or sales of investment contracts, especially since the payment for these XRP sales never traced back to Ripple.
Following this pivotal ruling, Coinbase promptly announced the re-enabling of XRP trading on its platform:
Around the same timetime, Gemini expressed interest in listing XRP for spot and derivatives trading:
By August 10, Gemini had officially added support for XRP, marking its first-time listing of the cryptocurrency:
One of the first journalists to report this news on micro-blogging platform X (formerly known as Twitter) was Eleanor Terrett, Journalist and Producer for Charlie Gasparino at Fox Business Network.
Amidst this backdrop, James Seyffart, an ETF research analyst at Bloomberg Intelligence, took to X to share his perspective on the possibility of an XRP ETF. Seyffart mentioned that, in recent weeks, he’s been frequently asked about the potential for an XRP ETF. However, he expressed doubt about the viability of such an ETF under the current SEC’s stance. Furthermore, he highlighted that there appears to be minimal interest from issuers in pursuing an XRP ETF.
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