Crypto surges following Ripple-XRP ruling

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Cryptocurrencies and crypto-related stocks experienced a surge after a federal judge ruled that the sale of Ripple Labs’ XRP tokens did not violate federal securities laws.

CoinDesk data show that Bitcoin (BTC) surpassed the $31,000 resistance level and reached $31,700, the highest level in more than a year. Blockchain native tokens like Solana (SOL), Polygon (MATIC) and Cardano (ADA) also saw a rise of approximately 15 percent. XRP itself witnessed a substantial increase of about 70 percent, reaching $0.80.

These tokens had previously faced scrutiny from the U.S. Securities and Exchange Commission (SEC), with the agency listing them as unregistered securities.

In the stock market, Coinbase saw a surge of 24 percent, reaching its highest level since August 2022. MicroStrategy (MSTR) also experienced a 12 percent increase. Crypto miners, such as Marathon Digital (MARA) and Riot Platforms (RIOT), recorded 14 percent and 19 percent gains, respectively.

“Investors have been on the sidelines due to the Security and Exchange (SEC) having a very public and harsh view on crypto,” said Charles Storry, head of growth at crypto index platform Phuture.

“The Ripple case ruling has been the start of some of that capital beginning to enter the space.”

Although XRP trading activities had not yet resumed, Coinbase said that trading would begin later if liquidity conditions were met. Trading pairs involving XRP — such as XRP-USD, XRP-USDT and XRP-EUR — will be launched gradually. Certain jurisdictions, however, may have restrictions on XRP support.

According to Parsec CEO and founder Will Sheehan, the ruling in the Ripple case has attracted the attention of investors and traders that have been waiting for a catalyst to enter the crypto market.

Legal ruling on Ripple’s XRP

On July 13, Judge Analisa Torres ruled that Ripple’s XRP token does not immediately qualify as a security when offered through programmatic sales or distributed to Ripple employees.

However, contracts worth $728 million for selling XRP to institutional investors were considered unregistered securities because investors expect to profit from Ripple’s efforts.

In her Ripple ruling, Judge Torres also said that she could not make a ruling on secondary sales of XRP, including those on exchanges. The reason was that the issue was not adequately presented to the court.

Nevertheless, after conducting a thorough analysis, Coinbase chief legal officer Paul Grewall expressed confidence in relisting XRP for trading.

Advantage for Coinbase case

The SEC filed the suit against Ripple in 2020. Analysts explain that Ripple’s ruling could be a reference point for Coinbase’s legal battle. Both cases revolve around the fundamental question of whether these digital tokens should be classified as securities.

“The ruling that XRP is not itself an investment contract is a significant blow to the SEC’s case against @Coinbase and the other crypto exchanges,” wrote digital assets and metaverse analyst James Murphy on Twitter.

Although it’s not a “binding precedent,” Murphy suggested the judges in Coinbase’s case would consider the Ripple ruling in their future proceedings. The SEC filed a lawsuit against Coinbase in early June, claiming the exchange had failed to register as a security exchange and offered unregistered securities.

Coinbase, however, denied these allegations. The lawsuit is now progressing through its pre-trial motions.