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Read more: Ripple SEC Lawsuit May Continue As SEC Appeals Ruling
According to Bloomberg, while this fine was only a fraction of the $2 billion that the US SEC had called for, it could prove a powerful harbinger of the regulatory fate awaiting other crypto companies.
The Ripple legal case began back in December 2020, after which the SEC charged Ripple and its top executives co-founder Christian Larsen and CEO Bradley Garlinghouse over grounds of creating an information void that allowed them to sell more than $1 bln worth of XRP.
It said that XRP passed the Howey test, which includes an investment in a common enterprise with the expectation of profits from the efforts of others. On the other hand, Ripple argued it failed the test since it was selling its token in secondary markets without pooling profits.
Analisa Torres decided, in her ruling in July 2023, that XRP was a security when it was sold to institutional investors and not to the general public. It is this nuanced ruling that has been interpreted by many as somewhat of a win for Ripple, one that could turn out to be definitional for the crypto industry at large. Even though Ripple supporters hailed the ruling, it also gave some leverage to the SEC in pursuit of further regulatory actions.
The Ripple legal case has played the role of a touchstone for further discourse on the continuous call for the regulation of cryptocurrency. It sets the complexion of the regulatory landscape moving ahead amid the SEC’s action against other crypto entities, such as Terraform Labs, Binance, and Coinbase.
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