According to Stone Bridge Ventures Senior Account Manager Steve Sala, Ripple’s impressive victory will have major implications for Malaysia’s own crypto investment sector. After overcoming scrutiny and coming out of the lawsuit unscathed, Ripple is gaining immense traction. In many ways, investors are calling it the white knight in the world of crypto.
Ripple Revives Altcoin Market With Historic Win
Early this month, the judge at a District Court in the Southern District in New York ruled that Ripple Labs’ sale of their XRP token didn’t violate securities laws. Soon after, the value of XRP increased by 78 percent, and it’s still going up. In the US, its market capitalization has surged to $36 billion from $25 billion. Similarly, its crypto market share has jumped from 2 percent to 3.5 percent, based on a report from CoinMarketCap.
With this victory, Ripple has revived the market for altcoins, which refer to cryptocurrencies excluding Bitcoin. That’s because most regulatory scrutiny targeting the crypto sector looks at whether some coins should be treated as securities, which are tightly regulated. This could have a domino effect in other countries that treat cryptocurrencies like securities, such as Malaysia.
Why It Matters if a Cryptocurrency Is or Isn’t a Security
Now, many local investors are wondering why it matters whether or not a cryptocurrency token is treated as a security. If something is a security, which was implied by the US SEC, it means that it’s similar to the shares of a company’s stock that’s trying to raise money.
It matters because if a token is considered a security, it becomes much more expensive and complex to operate a crypto exchange. As a result, exchanges would be subject to extensive scrutiny by regulators and penalties. At the same time, advocates for increased regulation believe that it can help increase transparency for investors.
But Stone Bridge Ventures Senior Account Manager, Steve Sala, explains that the cryptocurrency is decentralized in a way that makes securities laws a poor fit. Hence, they argue that cryptocurrencies should be considered commodities rather than securities.
How The Verdict Can Affect Malaysia’s Crypto Sector
This also raises the question of how the Ripple verdict can change the current environment surrounding crypto investment in Malaysia. There are two ways. The first is that it can change the regulator’s stance toward cryptocurrencies. It’s possible that the Securities Commission will adopt more flexible rules when scrutinizing crypto exchanges.
Such a move can revive the country’s crypto sector by increasing competition among crypto exchanges. As more crypto-based businesses crop up, investors will have more options when it comes to purchasing cryptocurrency. Another potential advantage of such a verdict is that it changes the sentiment surrounding crypto entirely. As mentioned above, its market share has increased, as well as its market capitalization.
Based on an analysis by Stone Bridge Ventures Steve Sala, it could reignite a bullish sentiment among investors who needed a signal that the market is active again. It could be the start of a potential uptrend as well, with other cryptocurrencies picking up steam and gaining more value. But as of now, this is just speculation, and the country’s crypto enthusiasts will have to wait and see how the government responds.