14 Jul, 2023

Judge Rules XRP Not a Security: Ripple’s Major SEC Victory

Shawn Munir
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Shawn Munir is the CEO of Coinweb.com and spearheads all the collaborative partnerships for the platform. He bought his first Bitcoin in 2017 and never looked back. He is also an investor in 200+ Web3 startups and is considered an expert in the field. Before building Coinweb with his co-founders, he co-founded Presail, a management...
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Nikita Sachdev, an Indian-American entrepreneur, and investor, holds degrees in Chemistry and Business from the University of Texas, Austin, and James Cook University. Post-graduation, she co-founded Singapore-based talent agency Luna Management in 2015, only to pivot into the crypto and blockchain sector in 2017 with the launch of Luna PR, a web3-oriented PR agency. During...


On the 13th of July, 2023, Ripple Labs gained a massive win in the United States District Court, New York. The court ruled partially in Ripple’s favor after the Securities and Exchange Commission filed a case against the company in 2020. The world was waiting for the judge’s verdict, which was announced recently.

Ripple’s XRP Token Surged 96% After Partial Victory in SEC Lawsuit, its highest level since March 2022.

Judge Analisa Torres granted summary judgment in Ripple’s favor and ruled that the XRP token does not qualify as a security. However, the ruling is only regarding programmatic sales on cryptocurrency exchanges. The court also ruled that XRP is a security when the token is sold to financial investment services.

US Judge Rules XRP is Not a Security

In December 2020, the SEC filed a court case against Ripple Labs that the company offered the public unregistered security. Two of Ripple’s chief executives, Brad Garling and Chris Larsen, were also involved in the lawsuit. Since the SEC took legal action, many dramatic moments have followed the case.

On Thursday, July 13, the U.S. District Court of the Southern District of New York ruled that the sale of XRP tokens on cryptocurrency exchange platforms did not constitute any investment contracts. However, Ripple did violate some federal securities laws by selling the token internationally.

XRP vs. SEC.
XRP vs. SEC.

What are the predictions of the ruling?

Early predictions from legal experts suggest that the court’s ruling still doesn’t settle the issue of under what circumstances virtual currencies or digital assets are called security. The SEC requires issuers to register their assets completely before selling them publicly. They also need cryptocurrency exchange platforms to register as broker-dealers before supporting them. 

The SEC claimed that XRP required more regulation and filed for the Ripple company to stop offering the token to the public. According to the U.S. District Court order, Ripple sold $729 million worth of XRP tokens directly to institutional buyers, financial services, and hedge funds.

What is the XRP case about?

The company’s institutional sales constituted the offering and selling of unregistered investment contracts. This is a violation of government policy and federal securities law. The reason for this is that investors would have purchased the XRP token intending to earn a profit from it.

The order from the court stated that the money Ripple gained from institutional sales went into “promoting and enhancing XRP’s value by developing uses for XRP and protecting the XRP trading market.” The court granted the SEC’s motion for a summary related to institutional sales.

According to the court, the programmatic sale of XRP using exchanges and algorithms did not qualify as selling securities. The reason is that the SEC cannot confidently say that speculative investors had “a reasonable expectation of profits to be made from the entrepreneurial or managerial efforts of others.”

The court also denied another motion from the SEC for a summary judgment on an “aiding and abetting claim.” The court decided that “it is not clear whether Larsen or Garlinghouse knew that securities laws applied to XRP instead of laws under regulatory regimes.”

What is the Future of XRP after the Lawsuit?

The price of XRP has surged by 96% in the last 24 hours, making it the largest gain among the major cryptocurrencies based on market capitalization after a U.S. judge ruled the sale of XRP tokens on exchanges did not constitute investment contracts.

XRP price surge.
XRP price surge.

According to data from CryptoWatch, XRP reached a peak of 93.8 cents, its highest level since March 2022. However, it has since settled to 81 cents at the time of this publication.

On Thursday, Coinbase (COIN) said it would restart trading for Ripple’s token if there is enough liquidity for its platform. “Coinbase will re-enable trading for XRP (XRP) on the XRP network,” the exchange said in a tweet on Thursday. “Once sufficient supply of this asset is established, trading on our XRP-USD, XRP-USDT, and XRP-EUR trading pairs will launch in phases,” Coinbase added.

Read our full article on how to buy XRP on Coinbase.


On Thursday, July 13, Ripple Labs partially won the SEC lawsuit filed against the company in 2020. The reason for the lawsuit was that the SEC sought regulation of XRP as a security. However, in a U.S. District Court in New York, the judge ruled partially in favor of Ripple. XRP price has risen to 29% since the ruling, and many believe the order opens the door to a new era of crypto exchanges.