- Ripple scored a landmark victory over the regulator on Thursday.
- The prolonged legal battle is expected to shape the regulations for digital assets.
JP Morgan viewed the court ruling for Ripple as a significant victory. However, according to the investment banking giant, the regulations by enforcement are far from over.
On Thursday, the US Southern District Court ruled partially in favor of Ripple, the FinTech company that issues XRP. The SEC and Ripple’s 2-year legal battle concluded with the ruling that cryptocurrency issuance on exchanges is not an investment contract.
“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,” JP Morgan wrote in the note seen by Coindesk.
Following the landmark ruling, the price of cryptocurrencies soared as sentiment changed in the digital asset space. The cost of XRP rose by about 70%, while Bitcoin reached its highest level in more than a year.
SEC’s Next Step
However, according to JPMorgan, the ruling may not be the end of what has come to be termed as regulations by enforcement by the SEC, as the regulator could appeal the case or bring similar charges against other cryptocurrency companies.
In June, Binance, the leading crypto exchange, faced 13 charges from the SEC, one being the sale of unauthorized securities. The regulator sued Coinbase, the largest US cryptocurrency exchange, for security law violations.
At the start of the year, the SEC brought charges against Gemini and Genesis for allegedly violating the securities regulations related to crypto lending. In February, it fined crypto exchange Kraken $30 million and ordered the platform to cease offering staking services to US users.
