Crypto market surges as Ripple's XRP not a security measure

Crypto market surges as Ripple's XRP not a security measure

The value of cryptocurrencies is on the rise following a Supreme Court's decision that Ripple's XRP is not a security measure.

Judge Analisa Torres, who oversees a major case between the SEC and the issuers of the digital asset, wrote that contract, transaction or scheme that embodies the Howey requirements of an investment contract. The Howey Test is a legal framework that identifies whether an investment offer is a security.

The news sent XRP's value soaring - the digital asset surged over 55% to $0.73 in a matter of hours.

Ether's share is up more than 6%, trading above $2,000 for the first time since early May. Bitcoin soared more than 2% to $31,100. The cryptocurrency market has experienced a surge of 4.9% in the last 24 hours, with the market capitalization reaching nearly $1.29T.

The suitors - Chris Larsen, Brad Garlinghouse, and Ripple Labs Inc. - have been mired in legal proceedings with the SEC since 2020.

The price action shows how much the legal and regulatory scrutiny that has blanketed the cryptocurrency industry this year has impacted market sentiment. The SEC has filed suit against major exchanges, including Binance and Coinbase, for allegedly violating securities laws.

Major tokens named in the lawsuits, such as ADA, SOL, and MATIC, have all posted double-digit percentage gains, suggesting that investors and traders are considering today's ruling as a bellwether for the legal standing of the entire digital asset market.

To be certain, the judge didn't clear Ripple of all violations, which the ruling singled out Ripple's institutional sales efforts as constituting investment contracts and violating securities laws.

The judge, however, found that Ripple's programmetic sales were not an investment contract. Programmmatic sales is making XRP available on exchanges where buyers could purchase the digital asset.

Caitlin Long, CEO and co-founder of Custodia Bank, which provides payment rails and custody for digital assets, believes the judge's ruling will push U.S. lawmakers to develop laws specific to the crypto sector.

The main conflict affecting the U.S. government bodies, and especially the SEC, is that current laws are sufficient to regulate the digital asset market. On the other hand, those involved contend that current laws don't account for the unique situations that arise from the use of public blockchains.

Bill Hughes, a lawyer at Consensys, a major company building blockchain-adjacent products since 2014, thinks it very likely that the SEC will appeal the ruling.