What happened

Ripple's XRP (CRYPTO:XRP) token surged in trading on Saturday. As of noon ET Saturday, the price of the digital token had risen about 8.3 percent in the past 24 hours.

XRP's tokens gained significantly after Ripple and key company executives made favorable progress in a legal case with the Securities and Exchange Commission (SEC). According to the case, the SEC alleges that Ripple, its CEO Brad Garlinghouse, and its Executive Chairman Chris Larsen conducted $1.3 billion worth of unregistered securities offerings through the distribution of XRP tokens.

Photo credit: Getty Images.

So?

The judge denied the SEC's motion to block Ripple from using its "fair notice" defense, stating that the company lacked reasonable notice and "acted in violation of the law and violated Ripple's due process rights." In a message posted on Twitter, Ripple CEO Brad Garlinghouse described the judge's actions as a huge victory for the company. Garlinghouse also said in a follow-up tweet, "While we hope the case against Chris and I is now over, the SEC must now prove its claims. We believe everyone will eventually be dismissed."

Stuart Alderoty, Ripple's general counsel, said the judge in his recent order highlighted the issue of whether the SEC had provided Ripple with sufficient notice that the securities laws would prohibit the company from distributing XRP.

What to do

The SEC's lawsuit against Ripple, Garlinghouse and Larsen has created uncertainty about the future of XRP. The judge's order means Ripple can argue fair notice in the case and use it to determine a verdict, but investors should know that this doesn't necessarily mean the company will ultimately prevail in the matter.

Even with today's gains, XRP's token price is still down about 4% year to date and 77% from its all-time high set in January 2018. ripple now has a market cap of about $38 billion, ranking sixth overall cryptocurrency by valuation.