Ripple’s Case Could Help Resolve Pending Crypto-SEC Lawsuits, Bloomberg Reports

The four-year-long Ripple vs SEC lawsuit came to a major point on August 7 when Judge Torress issued a ruling that was perceived as a victory independently by both entities. The Judge ordered Ripple Labs to pay a $125 million civil penalty after finding that the blockchain giant violated securities laws by offering XRP to institutional investors.

Even though it was far below the almost $2 billion sought by the SEC, the regulatory watchdog celebrated that Ripple will pay 170% more than the $10 million it suggested. Interestingly, the ruling could help shape and resolve pending SEC lawsuits with other crypto firms.

Ripple vs SEC Case Could Influence How Crypto is Classified

The Ripple case started in December 2020 after the SEC accused the blockchain company of breaking federal securities laws by offering unregistered securities in XRP. The regulator also sued top Ripple executives including its CEO Bradley Garlinghouse, and co-founder Chris Larsen, accusing them of selling over $1 billion XRP in the open market that only had limited information about the coin.

The lawsuit became one of the biggest topics in the crypto industry as several advocate groups rallied behind Ripple in challenging the SEC’s opinion. However, the Securities and Exchange Commission moved on to launch enforcement on several crypto giant companies including Binance, Coinbase, and Terraform Labs, alleging that they violated laws in one way or another.

Meanwhile, a recent report from Bloomberg pointed out that the court’s decision on the Ripple-SEC saga could be a yardstick that will help shape how cryptocurrencies are classified in terms of programmatic and secondary sales and potentially be a good omen for the pending court cases with the aforementioned crypto companies.

Recall that the SEC had challenged that XRP was a security under the Howey test, however, Ripple argued that the XRP sales took place in the secondary market without pooling of profits. Thus, Judge Torres decided in July 2023 that the XRP sales to the general public do not violate securities laws, but, it does to institutional clients hence the imposed civil penalty of $125 million.

Also, Ripple Labs has been barred under Section 5 of the Securities Act, preventing it from further violating securities laws by selling unregistered securities.

Meanwhile, rumors of a potential XRP ETF have started going around in the crypto community following a recent XRP futures contracts filing made by Bitnomial Exchange. According to the statement, reported by Coinfomania, the Chicago-based derivatives submitted a self-certification to the CFTC informing the body of its intention to launch XUS (XRP US Dollar Futures contracts) on its platform with trades to start after August 13.

The update sent a wave of optimism with speculations about an imminent XRP ETF because it is one of the first steps to take before applying for an exchange-traded fund product as was in the case of Bitcoin and Ethereum. Notably, the recent filing marks a major milestone towards bringing XRP to a broader market and increasing liquidity.

The price of XRP has enjoyed notable gains amid these developments. In the last 24 hours, the coin has gained 1.06%, changing hands at $0.577. Additionally, its one-day trading volume has seen a marginal uptick of 0.07% reflecting resurging trading and investor activities.