According to JPMorgan, the key court ruling going partially in favor of blockchain payments firm Ripple marks a monumental win for the entire crypto industry and provides clarity on what does and doesn’t qualify as a security.

One Giant Win For Crypto Industry

On Thursday, federal district judge Analisa Torres ruled that XRP token purchases via exchanges were not securities transactions. The decision was cheered by the crypto community and market observers like JPMorgan, who feel the outcome will help create more regulatory clarity.

“This ruling is undoubtedly a milestone win for the industry. It provides legal clarity and defense around what does and does not constitute a security, and that overall outcome is in favor of what many in the industry had been arguing,” strategists at JPMorgan said in a research report Friday.

The analysts noted that the lack of clear rules of the road had pushed large capital pools to the sidelines and also “slowed innovation, adoption, and just overall crypto ecosystem valuation”.

Notably, some digital asset exchanges had previously paused trading of XRP after the U.S. Securities and Exchange Commission (SEC) claimed that it was a security in December 2020. The regulator at the time filed a suit against the blockchain platform and its executives CEO Brad Garlinghouse and co-founder Christian Larsen alleging failure to register XRP as security before offering over $1.2 billion worth of tokens to the public. Exchanges including Coinbase, Kraken, BitStamp, and Crypto.com have now rushed to make XRP available to U.S. users again in the wake of the court ruling.

Not Over Yet?

Although Ripple’s victory is incredibly bullish, the bank’s analysts believe the fight for regulatory clarity is not yet over. This is because the SEC will likely appeal the decision to the 2nd Circuit and can also continue to launch similar cases in the future.

Nonetheless, they think the crypto industry “has now established stronger ground for the time being, which could affect ongoing cases, and also the pace of further litigation, but at a high level, we do not think the regulatory overhang simply disappears, it just lessens.”

After a parabolic rally following the verdict, XRP’s price took a 7.5% tumble to settle around $0.72 at the time of publication. The fifth-biggest crypto is now back below BNB Coin (BNB) after briefly surpassing it, CoinGecko data shows.

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Filed under: Bitcoin - @ July 15, 2023 12:23 pm