Remember our "Will SEC v. Ripple Spark a Bull Run?" digest from May?

We called a “win” for Ripple because it had a strong case. We also said it doesn’t make sense to apply 100-year-old laws to crypto.

The court agrees with us!

And the market responded with excitement by adding $22B to XRP's market cap in a matter of hours.

TLDR 📃 

1. In a landmark ruling, the court declares XRP is not a security, significantly winning its case against the SEC.
2. While Ripple still faces trial for institutional sales, XRP's value surged by over 35%, keeping its prospect of hitting the $1 mark alive.
3. The court decision provides regulatory clarity for other base layer tokens like Ethereum, Solana, Cosmos, targeted by the SEC.
4. Despite the victory, the future of DeFi tokens remains uncertain, keeping the industry's focus on Layer 1 and Layer 2 tokens.

Disclaimer: Not financial or investment advice. Any capital-related decisions you make are your full responsibility.

Here’s what we know! 📰

In a monumental ruling today,  Judge Torres says XRP is NOT a security. 

The ruling noted that "XRP, as a digital token, is not in and of itself a 'contract, transaction, or scheme' that embodies the Howey requirements of an investment contract."

Judge Torres had several matters to rule on in the lawsuit – three of which are most important to you.

1. Ripple's direct sales of XRP to large investors.
2. The programmatic sales (purchases of XRP on exchanges not directly from Ripple).
3. And the third, XRP that was distributed as grants or used for salaries. 

Judge Torres ruled that only direct sales to institutional investors constituted a sale of securities. The other two categories did not meet the Howey test.

What does this ruling mean for Ripple? 🤔

This day will go down in crypto history as a pivotal moment. Let’s unpack what it means for Ripple.

In essence, Ripple has secured a significant victory – with Judge Torres affirming that exchanges' XRP sales and its current trading do not qualify as securities. 

Yet, Ripple remains in hot water regarding sales made to institutional investors, such as hedge funds or private market investors.

A trial looms, where a jury will decide whether Garlinghouse and Larsen, Ripple's top brass, aided in breaching securities laws. Ripple must face the consequences for their institutional sales of XRP if found guilty. 

The road ahead for Ripple still promises a few bumps, but we celebrate today.

What does this WIN mean for crypto as a whole? 💪

Judge Torres' ruling is a significant victory for the crypto industry. If Ripple's token sales were not securities, other tokens facing SEC scrutiny, like SOL, MATIC, and ADA, are likely not securities.

This argument mainly applies to tokens similar to XRP, such as base layer tokens (Layer 1 and Layer 2 tokens). However, for DeFi tokens, this ruling does not provide sufficient clarity as they often function differently.

It's an even bigger win for ETH as it's more evident than ever that it is not a security. This could pique institutional interest in ETH and potentially lead to an ETH ETF.

Crypto exchanges also come out as winners because tokens issued on their platforms likely aren't securities. But on the flip side, institutional sales are seen as securities. Venture capital firms and hedge funds purchasing tokens directly from a project may face regulatory issues, as these transactions will likely be classified as securities.

XRP price analysis 📊 

Ripple winning the lawsuit was almost guaranteed to influence market-wide prices significantly, but its performance alone took the spotlight.

In just 20 minutes, XRP's price surged by over 35%, breaking past the $0.56 resistance mark on the weekly timeframe. In addition, it continues to trade in a bullish market structure, so good things are about to happen for XRP.

To put it simply for you, holding the $0.56 - $0.51 region on the weekly timeframe keeps the chance of reaching the legendary $1 mark ALIVE at some point during 2023.

However, it's important to remember that while XRP is experiencing a surge in value due to the hype and positive news surrounding the lawsuit, it's not entirely off the hook.

Ripple still faces repercussions for its institutional sales, and the trial could have negative implications for Ripple if the founders are found guilty. 

So, there's still a potential downside for Ripple, depending on the outcome of the trial.

Cryptonary’s take 🧠

While Ripple hasn't swept the board, this verdict is a momentous victory for the crypto industry. It significantly reins in the SEC's overreach over the sector.

The real winners of this ruling are base layers like Ethereum, Solana, Cosmos, Polygon, and Arbitrum. Their tokens have a similar design to XRP, and they've been in the SEC's crosshairs.

If XRP, issued by one of the most centralised entities in crypto, is not a security, it's unlikely that these other base layers will be either. Crypto exchanges can now continue to trade these assets with more certainty.

This ruling paves the way for increased regulatory clarity, strengthening the argument against the SEC. However, DeFi tokens remain in limbo, so the industry will likely focus on Layer 1 and Layer 2 tokens.  Curious to see where we’ve been investing our money (literally)? Check out our latest round of investments here.

And when all is said and done,  we’ve got a big win today – crypto is here to stay, and not even a regulator wielding 100-year-old laws can stop it!

As always, thanks for reading. 🙏

Cryptonary, out!