Cryptocurrencies were soaring Thursday, led by a monster surge of the asset associated with Ripple Labs, XRP. The rally for the crypto, which was enjoying a double-digit percentage gain, came as a federal judge ruled that the crypto isn’t a security when sold to retail investors on digital-asset exchanges.
XRP
XRPUSD,
has rallied over 80% Thursday to around $0.85, representing its highest level since around December of 2021, at last check, based on CoinDesk data.
U.S. District Judge Analisa Torres said Ripple’s sales to sophisticated institutional investors would, however, qualify as an unregistered sale of investment contracts, in violation of federal law, representing only a partial win for those who have advocated that XRP isn’t a security.
Ripple’s CEO Brad Garlinghouse has argued that XRP, developed for cross-border payments, isn’t a security.
Still, the XRP lawsuit “shows a clear pathway for tokens other than BTC to be deemed “not a security,” Jeff Dorman, chief investment officer at Arca, wrote on Twitter.
The ruling may be especially bullish for crypto other than bitcoin.
Ether
ETHUSD,
prices rose by about 5.7% to around $2,011, marking the highest level since May; while Solana
SOLUSD,
rose 18% on Thursday and Polygon
MATICUSD,
values rallied 20%. Bitcoin
BTCUSD,
prices were up 3% over the past 24 hours.
Read: Ripple token not a security in retail sales, judge rules in partial win for crypto
Whether cryptocurrencies are “securities” is a central basis for the regulatory strategy of the Securities and Exchange Commission. Securities sold to the public must be registered with the SEC, which requires providing investors with regular financial statements and disclosures about business and potential risks.
Gary Gensler, SEC chairman, has repeatedly claimed that most crypto are securities and therefore should fall within the remit of his agency. Bitcoin, the original and largest crypto by size, is the only digital asset that the chairman has described as a commodity and not a security.
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