Ripple scored a partial victory in its fight with the US Securities and Exchange Commission in a court ruling that brought a modicum of regulatory clarity for the cryptocurrency industry, reports Coindesk.
The sale of Ripple’s XRP tokens on exchanges and through algorithms did not constitute investment contracts, the US District Court of the Southern District of New York ruled, but the institutional sale of the tokens did violate federal securities laws, the court said.
XRP rallied on the news, and crypto exchange Gemini said it might now list the token, but early reads from legal experts suggest the ruling falls short of settling the question of whether and under what circumstances a digital asset meets the definition of a security under US law.
Under Chairman Gary Gensler, the SEC has contended most of them do, and thus that they require issuers to go through a lengthy and expensive registration process before selling them to the public, and exchanges to register as broker-dealers before listing them. The industry has maintained that it is ambiguous how laws written during the analogue era apply to an asset class born on the internet.