Ripple is still viewed as a bad actor despite legal victory

With Ripple Labs' decision not to appeal the SEC and to settle for a $50 million fine, the XRP case seems closed.

With Ripple Labs' decision not to appeal the U.S. securities regulator SEC and to settle for a $50 million fine, the XRP case seems closed. Yet lawyers find the outcome unsatisfying.

In a reaction to Cointelegraph, Yuriy Brisov of Digital & Analogue Partners says the legal win is positive for XRP's price. But he adds: “For the sector, this means the long-awaited precedent-setting case, which has been watched for more than four years, won’t happen.”

The issue, according to Brisov, lies in the ruling's legal status: “If you want a case to serve as a precedent, it needs to reach a higher court level; that didn’t happen here.” While the ruling was in Ripple's favor, it is not legally binding for future cases.

For the crypto industry, this is, according to Joshua Chu of the Hong Kong Web3 Association, a missed opportunity. Ripple was not fully cleared of SEC accusations. Even more: the firm has been labeled a "bad actor" under Rule 506 of Regulation D.

That designation means Ripple violated U.S. securities laws when selling XRP to institutional investors. And that has consequences: for the next five years the company may not strike institutional deals for its tokens.

At the time of writing, XRP trades at $2.04 — down 7% from last week. The Ripple token, like the broader crypto market, is feeling the impact of the escalating trade tensions.

Still, Brisov sees a reason for XRP holders to be optimistic: “In the real economy, this is, in my view, a clear win for Ripple. The designation as a ‘bad actor’ doesn’t affect Ripple’s market strategy.”