While Ripple and its XRP token have won a major battle against the SEC, this court decision is full of lessons for the cryptocurrency ecosystem. Indeed, this victory is far from being total, and this will not prevent other trials from being conducted. We take stock of these different elements.
The XRP case: a precedent for cryptocurrencies
While Ripple’s XRP has won a major battle against the Securities and Exchange Commission (SEC), this brings with it numerous regulatory clarifications for the cryptocurrency ecosystem.
As we have seen, this victory is not total and there will be a lawsuit as to how Ripple promoted its token to institutional investors. And for good reason, the practices that have been carried out constitute a violation of securities law.
For example, Judge Analisa Torres relies on different publicity brochures issued since 2013, as well as posts by Ripple executives on various social networks like Reddit. In this communication, it would have been clearly put forward that the successes of Ripple and XRP were linked.
This therefore justifies a lawsuit, without making XRP a security on the secondary market, as has been recorded.
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A qualification to be analyzed under different prisms
To sum up, this court decision opens the door to more complex reflections than it seems.
And for good reason, it is not only a question of defining whether or not a cryptocurrency constitutes a security, but of analyzing all of the communication that surrounds it.
In this precise case, XRP is not considered a security, nevertheless, Ripple remains prosecuted for having violated the rules surrounding these same securities. This means that a similar pattern can repeat itself for all cryptocurrencies on the market.
Even so, this state of affairs provides enough clarity for centralized platforms to list XRP again without fear of being sued. This has also benefited the entire market.and particularly to altcoins which have recently faced questions about their classification such as MATIC, ALGO or SAND to take just a few examples.
As a result, the idea that the SEC could close the US market to certain cryptocurrencies seems to be receding. Nevertheless, it will not be surprising to see new waves of lawsuits on how all of these assets have been promoted to investors in the past. Indeed, this is the whole nuance of the verdict of Judge Analisa Torres.
Eventually, each situation is to be analyzed on a case-by-case basis. Thus, just because trading a cryptocurrency on the secondary market does not necessarily fall under securities law, does not mean that it applies to all actions surrounding this same asset.
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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