Ripple Labs has scored a partial victory in its fight with the U.S. Securities and Exchange Commission (SEC) in a court ruling that brought some regulatory clarity for the cryptocurrency industry. A judge in the U.S. District Court for the Southern District of New York ruled Thursday that the sale of Ripple’s XRP tokens on exchanges and through algorithms did not constitute investment contracts. However, the judge ruled that the institutional sale of the tokens did violate federal securities laws.
XRP surged as much as 80% on the news, with crypto exchanges Coinbase and Gemini among those saying they might list or re-list the token. Townsend Lansing, Head of Product at CoinShares, noted that “the Court has found Ripple to be in violation of securities laws, specifically in relation to direct sales to institutional investors. As such, XRP is not only deemed a security, but questions have arisen regarding the legality of its offering.”
The ruling has seen XRP surpass Binance’s BNB token to become the world’s fourth-largest digital asset by market cap after its 66% post-court ruling advance brought its valuation to $41.44 billion, according to market data.
In other news, Alex Mashinsky, co-founder and former CEO of insolvent crypto lender Celsius, was arrested in New York on Thursday following an investigation into the company’s collapse. Mashinsky and others are charged with seven criminal counts including securities fraud, commodities fraud, wire fraud and conspiracy to manipulate the price of Celsius’ token CEL, according to the unsealed DOJ indictment.