Last month, the judge’s summary decision regarding Ripple caused a significant increase in demand in the markets. Although it may not have been a permanent rise, it was significant enough to have a substantial impact on the future of altcoins in the long run. Following this, another decision was made in the Terra case, which caused confusion. Ripple’s Chief Legal Officer stepped in to address the issue.
Outcome of the Ripple Lawsuit
The decision made in July was seen as a partial victory for Ripple. It was ruled that sales on secondary markets, such as cryptocurrency exchanges, are not securities. This was great news for XRP Coin and thousands of altcoins. The fact that sales made on exchanges without reaching an agreement with buyers were not classified as securities was a critical win. Many altcoins, which were issued to investors through exchanges, had been labeled as securities, causing them much concern. This ruling allowed them to breathe a sigh of relief.
As a result, altcoins tested critical resistance levels. The classification of token sales to institutions as securities is a minor issue for altcoin issuers. It can be resolved with a monetary fine.
More importantly, the Ripple decision opened the door for exchanges to relist many altcoins that had been suspected of being securities.
Terra Case and the Ripple Lawsuit
However, there is a problem. Things took a turn approximately 24 hours ago with the news from Terraform Labs. The price of XRP Coin dropped below $0.7 again. This was due to the judge considering sales on secondary markets as securities, which supports the SEC‘s position. Ripple’s Chief Legal Officer came to the rescue of investors whose spirits were dampened by Bloomberg’s report. Stuart Alderoty stated:
“Let me clarify some of the confusion – the decision in the Terra case does not change ANYTHING about Ripple’s position that XRP is not a security. Additionally, the Terra case is just beginning, and the judge is required to accept everything the SEC alleges, at least for now. Our victory (based on the factual evidence developed over more than two years) came after it was closely read. When closely read, the Terra Judge actually acknowledges that oranges, without the promise of processing and sharing profits from orchards, are not securities on their own. There must be an agreement between the parties to have an investment contract. Tokens that are not intertwined with other rights and promises are not securities on their own. Any commentary on the Ripple decision is unnecessary, confusing, and not binding.”
In summary, Ripple’s CLO assured that there is no cause for concern.
