The crypto industry was abuzz last week after a two-year legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) ended with a court ruling that XRP is an unregistered security when sold to institutional buyers, but not when bought by anyone else. Despite the news, XRP’s token price nearly doubled and trading volumes exploded by an eye-watering 1,351%.
However, the ruling has done nothing to make clear where crypto will stand in the eyes of U.S. law. As Ripple argued, it is fundamentally incorrect to call XRP a security, despite the fact that there is a company behind it. This has led to a strange situation where XRP is an unregistered security sometimes.
It’s like saying someone who buys a house as an investment is buying real estate, but a person who buys a house to live in is not buying real estate, said The Node newsletter. It’s nonsense. Either XRP is a security, or it is not. These should be mutually exclusive.
The court ultimately decided that the answer to is this a security? was it depends. JMP Securities published a research note that stated the ruling provides legal clarity and defense around what does and does not constitute a security, but this is not what was provided.
So, no, this is not a milestone win for the crypto industry, concluded The Node.