In a significant legal victory for the cryptocurrency industry, Ripple Labs Inc has been ruled by a U.S. judge to not have violated federal securities law when selling its XRP token on public exchanges.

The ruling caused the value of XRP to surge by 25%.

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However, the judge did find that Ripple violated securities laws by selling XRP directly to sophisticated investors. This is the first time a U.S. judge has ruled in favor of a cryptocurrency company, deeming certain digital asset sales to fall outside of securities law. The ruling may be subject to appeal. The U.S. Securities and Exchange Commission (SEC) had accused Ripple of conducting an unregistered securities offering worth $1.3 billion. Ripple's sales on public cryptocurrency exchanges were deemed not to be securities offers, as purchasers did not have a reasonable expectation of profit tied to Ripple's efforts.

How to buy ripple stock before ipo

Sales by Ripple's CEO and co-founder were also ruled not to involve securities, but a jury will decide if they aided the company's violation of the law. The ruling is expected to have implications for other crypto-related legal cases, including Coinbase's battle with the SEC. It has also reignited calls for legislative clarification on the status of digital assets.

Ripple Stock

Ripple stock price has been hedging higher, though the price raise started before the judgment.

Ripple IPO

Ripple's recent court victory against the US Securities and Exchange Commission, which classified XRP as a non-security digital asset, has sparked speculation about a possible Initial Public Offering (IPO). This win, significant for Ripple, the XRP community, and the larger crypto sector, comes after almost three years of litigation.

When Ripple decides to go public, it will mark one of the first major instances of a blockchain company transitioning to traditional markets, setting a precedent within the crypto industry. An IPO could offer Ripple more funding for expansion and credibility with traditional financial institutions. However, the details, such as the potential value of the IPO and the timeline for its execution, remain speculative as of now.

Ripple valuation

Ripple achieved a valuation of $9.8 billion in December 2019, after raising $200 million in a Series C funding round. However, Ripple later repurchased the shares from its investors, which boosted the company's valuation to $15 billion, a third higher than its previous valuation. This suggests Ripple's confidence, even in the face of the SEC lawsuit, and augurs well for a potential IPO. While Ripple's finances remain confidential due to its private status, a spokesperson highlighted the company's strong market position following the share buyback, stating, "Ripple is cash flow positive, has $1 billion in the bank, and a strong balance sheet."

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Ripple vs. SEC update & consequences for Ripple stock and Ripple IPO. July 23, 2023