We're excited to bring you the news that XRP is now available on our platform!
You might be wondering, what was the whole story behind this lawsuit?
In this brief article, we will be explaining the history of XRP, the legal battle, and the decision involving Ripple Labs and the SEC.
A Brief History of XRP
XRP was created in 2012 by Ripple Labs Inc as a digital currency for cross-border transactions. The main goal of XRP was to provide a fast and secure way to transfer money across borders without central intermediaries, as the technology was based on a decentralized ledger. At its peak, XRP was the third-largest cryptocurrency in the world but there was a significant decline primarily due to legal issues surrounding Ripple Labs Inc., the company behind XRP.
In December 2020, the SEC filed a lawsuit against Ripple Labs and its current and former CEOs, claiming that they had effectively conducted an initial public offering (IPO) of XRP without registering it as a security. The allegation further extended to the selling of XRP tokens in unregistered security offerings to investors both within the United States and globally. Additionally, Ripple Labs purportedly offered billions of XRP in return for non-monetary services such as market-making and labor. The SEC holds that these actions contravene US securities regulations and numerous exchanges removed XRP from their listings.
The SEC argued that XRP is a security because the tokens were used to fund Ripple's platform and the sales of XRP enriched the platform's management. In addition, the SEC argued that XRP met the criteria of the Howey test, which requires securities to be registered with the SEC.
Ripple Fights Back
Ripple argued that the SEC failed to provide fair notice that Ripple's conduct was in violation of securities law. Ripple further argued that XRP should not be treated as a security or investment contract just like the SEC looks at Ethereum and Bitcoin. Ripple's contention was that the SEC was biased in its application of the security concept to virtual currencies like XRP.
On July 13, 2023, the judge in the case ruled in Ripple’s favor, granting partial summary judgment, allowing that the XRP token is not a security.
Now with the ruling in Ripples Labs’ favor, we can move forward with the confidence and clarity of relisting XRP on our platform.
As we anticipate a future where the SEC brings increased clarity to crypto, we see an exciting opportunity for progress, creating the potential to accelerate mainstream adoption in the industry.
At iTrustCapital, we believe in forging a path of understanding in this complex landscape. We’re thrilled to welcome XRP back on our platform and eagerly look forward to the diverse opportunities this space will offer for both our organization and our valued clients.
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