The United States Securities and Exchange Commission (SEC) has granted Ripple an exemption allowing the company to sell securities to private investors. This news has drawn attention to the legal aspects and industry reactions.
SEC and Ripple
The ongoing appeal process between Ripple and the SEC has been closely monitored by the industry in recent months. Both parties had previously dismissed the main case in March while working collaboratively to lift the ban on Ripple’s sale of securities to individual investors. Traditional methods to lift this restriction had not succeeded, rendering the recent exemption even more pivotal.
Despite the challenges, the SEC addressed Ripple’s request with an unconventional solution by issuing an exemption last week. The exemption stated that, given current conditions, there was no need for sanctions against Ripple. With this decision, the SEC lifted the restriction on Ripple’s securities sales.
Legal Controversies
Following this decision, legal experts have deemed the development unprecedented and controversial. Marc Fagel, a former SEC official, has described the process as such, while recalling that Judge Torres had explicitly rejected Ripple’s requests several times in the past.
>CITE_W_A: "This exemption is a clear challenge to the court."
According to Fagel, there seems to be no straightforward mechanism to annul or prevent the exemption. The courts cannot take direct action on this issue, and the SEC may refrain from acting unless a formal complaint arises.
>CITE_W_A: "Even if it is unlawful, who would complain? Unless investors are harmed and ask why this wasn’t blocked…"
Impact on Ripple and the Community
With the exemption in place, Ripple’s new securities sales appear entirely legal, and the company can defend this position. In the short term, Ripple secured a new source of income, potentially fueling growth and the development of new projects. Although the XRP community welcomes this progress, the possibility of exemption revocation keeps stakeholders vigilant.
Unable to resolve the issue in court, the SEC opened the door for Ripple’s institutional sales with the exemption. The inability to settle the matters with the court softened the pressure exerted by Gensler’s administration through the exemption. The exemption granted to Ripple contradicts Torres’s ruling, showcasing the freedom gained by cryptocurrencies under Trump’s administration.
The SEC's exemption for Ripple continues to raise debates in both legal and financial communities. While the company benefits from a new source of income, questions about the legality and fairness of such practices remain open.
