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Ripple Secures Partial Victory Against SEC, Opening Doors for XRP Adoption

Updated: Jul 20, 2023


Ripple XRP secures victory opening path to adoption
Image source: shutterstock.com

WASHINGTON D.C. - Ripple secured a partial victory at its legal dispute against the Securities and Exchange Commission on July 13, which might pave the way for broader adoption of XRP.

The legal fight between the SEC and Ripple started in December 2020, when the SEC filed a lawsuit against Ripple. The SEC argued that the company’s native currency XRP was a security, but was launched by ICO without registration. Therefore, the SEC requested to acquire nearly $2 billion collected from the XRP sales.


SEC Securities Criteria


The SEC evaluates all assets by four criterias to decide if they are securities or not. According to these criteria, an asset is a security if:


  1. It requires and investment of money (or something else of value) to acquire,

  2. It has the same price for all of its holders,

  3. It offers an expectation of profit,

  4. The expectation of profit comes from the managerial efforts of a third party.


On July 13, 2023, the U.S. District Judge Analisa Torres ruled that buyers of XRP didn’t have a reasonable expectation of profit at the time, which failed to fulfill the SEC’s third criteria. Therefore, XRP sales were not considered as securities under the law. However, the Judge also noted that institutional buyers of Ripple might count as unregistered sales of securities.


XRP July 18, 2023
Source: TradingView

Price Pop Amid XRP Adoption Hopes


Nevertheless, XRP responded to this news by jumping over 97% within a few hours on July 13 by increasing from $0.4734 to $0.9365. At the time of writing, the token is being traded for around $0.7507, which is still over 58% more than its price on July 13.


What makes Ripple a unique blockchain is its ability to offer On-Demand Liquidity (ODL) to institutional customers, which can use XRP for money transfers. According to Ripple’s general counsel, Stu Alderoty, Ripple is hopeful that it can provide an alternative to swift transfers after the recent developments on the lawsuit.


In his interview with CNBC, Alderoty stated:


“I think we’re hopeful that this decision would give financial institution customers or potential customers comfort to at least come in and start having the conversation about what problems they are experiencing in their business, real-world problems in terms of moving value across borders without incurring obscene fees.”


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