Marketing Scoops: Investors Bet Big on Ripple’s Win Against SEC As XRP Futures Trading Doubles

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As the legal battle between the United States Securities and Exchange Commission (SEC) and Ripple continues, the cryptocurrency community is betting that the blockchain company’s victory could open an alt season, which has led to an increase in open interest in XRP perpetual futures. Indeed, the volume of XRP perpetual futures open interest has surpassed $600 million on five different crypto exchanges, increasing nearly $400 million over the previous seven days, according to the data and chart shared on Twitter by the crypto analytics platform Kaiko on March 31..…Story continues….

By: Ana Zirojevic

Source: Finbold

Critics:

A class action was filed against Ripple in May 2018 “alleging that it led a scheme to raise hundreds of millions of dollars through unregistered sales of its XRP tokens”. According to the complaint, “the company created billions of coins ‘out of thin air’ and then profited by selling them to the public in ‘what is essentially a never-ending initial coin offering’”.

The U.S. Securities and Exchange Commission (SEC) initiated legal proceedings against Ripple Labs, CEO Brad Garlinghouse, and co-founder Chris Larsen on December 21, 2020, for allegedly selling unregistered securities. In the lawsuit, the SEC claimed that XRP was a security instead of a commodity, because it was generated and distributed by Ripple Labs in a centralized fashion.

It was not being adopted by financial institutions for its advertised use cases. The SEC stated that Ripple executives sold 14.6 billion units of XRP for more than $1.38 billion to fund the company’s operations and enrich themselves. In response, Garlinghouse criticized the SEC and indicated that Ripple Labs would defend itself in court.

Coinbase delisted XRP on December 28; an investor filed a class action on December 30 alleging that Coinbase sold XRP tokens with the understanding that they were unregistered securities. On April 13, 2021, SEC Commissioner Hester M. Peirce published the Token Safe Harbor Proposal 2.0, which is ″intended to provide Initial Development Teams with a three-year time period within which they can facilitate participation in.

The continued development of, a functional or decentralized network, exempt from the registration provisions of the federal securities laws so long as certain conditions are met.″ Judge Analisa Torres issued a decision on motions for summary judgement on 13 July 2023, and stated the XRP token itself is not a security, although the manner in which it is sold could constitute the sale of a security.

“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.” The ruling further found that the institutional sales of XRP tokens constituted the unregistered offer and sale of investment contracts. However programmatic sales and other XRP token sales by Ripple Labs did not constitute the offer and sale of investment contracts, she ruled. The case could subsequently go to a full trial, or be appealed.

For its creation and development of the Ripple protocol (RTXP) and the Ripple payment/exchange network Ripple Labs was named as one of 2014’s 50 Smartest Companies in the February 2014 edition of MIT Technology Review.

A scientific study made by two researchers from Stanford and Stockholm universities that studied the money production from an energy consumption point of view and a macroeconomic level stated that running a server on Ripple was comparable to the energy needs of running an email server.

Official source code”.Ripple Labs Banks $3.5M for Open-Source Payments System and Virtual Currency”.

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Ripple and Swift slug it out over cross-border payments”.