What happened

The price of XRP (XRP -1.92%), the cryptocurrency created by the company Ripple Labs, blasted nearly 36% higher today as of 1:09 p.m. ET after Ripple scored a big victory in court when a federal judge ruled that XRP is not "necessarily" a security.

So what

The U.S. Securities and Exchange Commission (SEC) sued Ripple several years ago, claiming the company sold XRP tokens without registering them with the SEC, which violated securities laws because XRP is in fact a security.

This has been a big point of contention in the crypto sphere. The SEC claims that many cryptocurrencies are in fact securities and therefore must be registered with the SEC and fall under the SEC's purview. But most crypto advocates believe that cryptocurrencies are currencies and therefore should be regulated by the Commodity Futures Trading Commission, so this case has been closely watched by the entire sector.

U.S. District Court Judge Analisa Torres essentially ruled in her decision that Ripple did violate securities laws when selling tokens to institutional investors but did not do so when selling the tokens on exchanges and through algorithms. Crypto advocates, as well as investors, hailed the ruling as a win.

"The outcome will no doubt have direct and indirect implications for crypto regulation here in the U.S. and worldwide -- possibly marking a major turning point, for better or for worse, for the future of crypto," Elliot Han, a managing director at the law firm Cantor Fitzgerald, told CNBC. "Also, it will likely have an important impact on the Binance and Coinbase lawsuits."

Now what

While the decision is split, I think the key here is that this could eventually open the door for exchanges to offer XRP -- and potentially other cryptocurrencies the SEC alleges are securities -- without worrying about breaking securities laws.

And if this case can help Binance and Coinbase avoid strict penalties from the SEC in their perspective lawsuits, that would also be a big win for the industry.