The recent court ruling in the SEC v. Ripple lawsuit provides another clarity for XRP.
It is no longer news that a New York federal court recently denied the SEC’s motion to certify an interlocutory appeal in the Ripple lawsuit.
Interestingly, the decision did not just deny the SEC’s bid to file an immediate appeal in the case; it also provided clarity for XRP Ledger (XRPL) and its native cryptocurrency, XRP.
As reported earlier, Attorney John Deaton highlighted the significance of Judge Analisa Torres’ decision, stating that XRP has now become the only altcoin with legal clarity in the US.
Ripple Doesn’t Own XRPL
In an interesting development, prominent XRP enthusiast “24HRSCrypto” shared an excerpt of the ruling where the judge emphasized that Ripple does not own the XRP Ledger (XRPL). The user referred to the court’s remark as clarity.
🤯🤯 This is what we call – CLARITY.
Today was a good day.#XRP #XRPCommunity #XRPHolders pic.twitter.com/iPMD7Lszge
— 𝟸𝟺𝙷𝚁𝚂𝙲𝚁𝚈𝙿𝚃𝙾 (@24hrscrypto1) October 4, 2023
According to the ruling, the SEC failed to show evidence that the development of use cases for the blockchain constitutes “tangible consideration to Ripple.”
Other Distributions Aren’t Securities
The court issued the decision in response to the SEC’s claim that Ripple’s other distribution of XRP violated securities laws. However, the court recently noted that its July 13 decision on Ripple’s other distributions was based on applying the Howey test to the facts of the case.
It emphasized that the first prong of Howey requires an investment of money. Applying the fact to the case, the court found that recipients of other distributions did not pay any money to Ripple.
Per the court, a significant part of the other distributions include grants given to third parties as part of efforts to develop new applications for XRPL and XRP.
Misconceptions About XRPL and XRP
It bears mentioning that several crypto enthusiasts believed that Ripple owned the XRPL and its native cryptocurrency. This is mainly because of Ripple’s close affiliation with XRP and the fact that the company holds a significant amount of the coin in escrow.
On the contrary, Ripple utilizes XRP as a bridge between two fiats for instant cross-border settlements. Ripple’s escrow system for XRP serves a vital purpose by ensuring a controlled release of the coin into the market.
Despite not owning XRPL, Ripple has launched groundbreaking payment solutions, including its CBDC platform, on the leading blockchain.
