Ripple Eyes US Banks after Legal Victory against the Regulator

Ripple has expressed optimism that banks and financial institutions in the US will start using its cryptocurrency, XRP following the court ruling in the case between the blockchain company and the Securities and Exchange Commission (SEC).

Last week, a judge in New York ruled that Ripple did not violate federal securities laws by selling XRP on public exchanges. However, the ruling, which concluded a long-standing legal battle between Ripple and the SEC, stated that the blockchain firm contravened the law by selling XRP to institutional clients.

Additionally, the sale of XRP by Ripple’s CEO, Brad Garlinghouse, and the Co-Founder and former CEO, Chris Larsen, on cryptocurrency exchanges did not amount to offering unregistered securities. Similarly, the federal court added that Ripple’s compensation to employees did not violate the securities federal laws.

Ripple Predicts Surge in XRP Adoption

Speaking in an interview with CNBC, Ripple’s General Counsel, Stu Alderoty, said that the San Francisco-based company expects to start discussions with financial institutions planning to use its on-demand liquidity (ODL) service in the third quarter. The service uses blockchain technology to enable users to transfer funds using XRP.

After the SEC sued Ripple and its executives in 2020, the company was dropped by major financial institutions that were using its services. For instance, MoneyGram ended its partnership with Ripple in 2021 without specifying the reason for its decision, Finance Magnates reported. The global money transfer giant had sought Ripple’s services for cross-border payments and foreign exchange settlements.

Besides that, Alderoty commented on the court's ruling that the sale of XRP to institutional clients amounted to offering unregistered securities and ought to have been registered. He said that Ripple was unlikely to be affected by the decision since most of its business was based outside the US.

Future of Crypto Regulations

The landmark ruling that extended a partial victory to Ripple against the SEC is expected to shape regulations of digital assets and narrow the scope of the regulator in controlling the sector. The SEC’s lawsuit against Ripple had forced several exchanges, including Coinbase, to delist XRP.

However, following last week’s ruling, Coinbase and Gemini have confirmed that they will relist the token, while Kraken has already enabled the trading of XRP. Furthermore, the SEC has sued Coinbase and Binance on similar allegations of offering unregistered securities.