Ripple, a blockchain-based digital payment network, has applied for a crypto license in the UK and Ireland after its partial win against the US Securities and Exchange Commission (SEC).
The company applied for crypto asset firm registration with the UK’s Financial Conduct Authority (FCA), along with a payment institution license in Ireland.
The move comes after a US court ruled in favor of Ripple in the ongoing lawsuit brought by the SEC, claiming that selling XRP on exchanges in itself does not constitute an investment contract.
Ripple claims that the decision is a “huge win” and “positive for [the company’s] growth in the US.”
Over the last 18 months, the company has increased its UK and European employees by about 75% and now has more than 100 of about 900 global employees based in its offices in London, Dublin, and Reykjavik, Iceland.
Here are the key points:
- Ripple has applied for a crypto license in the UK and Ireland.
- The move comes after a US court ruled in favor of Ripple in a lawsuit brought by the SEC.
- The ruling stated that XRP is not a security when sold to retail investors, but is a security when sold to institutional investors.
- Ripple claims that the ruling is a “huge win” and “positive for [the company’s] growth in the US.”
- The company has increased its UK and European employees by about 75% over the last 18 months.
Ripple did win against the SEC in a partial victory. In July 2023, U.S. District Judge Analisa Torres ruled that Ripple did not violate federal securities law by selling XRP on public exchanges. However, she also found that Ripple had sold XRP to institutional investors as unregistered securities.
Ripple was accused by the SEC of selling XRP as an unregistered security. The SEC argued that XRP was a security because it was sold to investors with the expectation of profits from Ripple’s success. Ripple argued that XRP was not a security because it was a digital currency that was used to send and receive payments.
Judge Torres agreed with Ripple on the first part of the argument. She found that the offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts. This is because investors who bought XRP on exchanges were not investing in Ripple, but were simply using XRP as a way to send and receive payments.
However, Judge Torres did find that Ripple had sold XRP to institutional investors as unregistered securities. This is because institutional investors were buying XRP with the expectation of profits from Ripple’s success.
Ripple has said that it is “pleased” with the ruling and that it “vindicates” its position that XRP is not a security. The SEC has said that it is “reviewing the decision” and that it “will determine next steps in due course.”
The ruling is a significant victory for Ripple, as it could help to pave the way for other cryptocurrency companies to operate in the United States without fear of being sued by the SEC. However, the ruling is also a reminder that the SEC is still taking a hard line on cryptocurrency regulation.
While many in the cryptocurrency industry have been celebrating Ripple’s partial win against the SEC, others have cautioned that the fight for regulatory clarity is far from over.
The SEC is currently reviewing the decision, and it is possible that the agency will challenge the ruling. Even if Ripple accepts the win, the firm still has to deal with the multi-billions of dollars in institutional sales that they are on the hook for.
Overall, the Ripple case is a significant victory for the cryptocurrency industry, but it is not the end of the road. The SEC is still taking a hard line on cryptocurrency regulation, and it is possible that the agency will continue to sue cryptocurrency companies that it believes are selling securities.
The crypto industry will need to continue to work with regulators in order to achieve the desired level of clarity.