Ripple CLO calls out US regulator for labeling crypto tokens as securities, SEC amends Binance lawsuit

XRP posts gains for a second consecutive day on Friday, extending Thursday’s surge, as Ripple Chief Legal Officer (CLO) Stuart Alderoty and Coinbase’s CLO Paul Grewal slammed the US Securities & Exchange Commission (SEC) stance over the usage of the term “crypto asset securities.”

The regulator clarified its use of the term “crypto asset securities” (that has no legal basis per Alderoty) and apologized for the confusion caused through an amendment to footnotes in the SEC vs. Binance lawsuit. 

Daily digest market movers: Ripple, Coinbase CLO slam regulator for wrongly referring to crypto tokens as securities 

• Crypto legal experts and CLOs of several exchanges and firms such as Ripple and Coinbase critiqued the SEC’s use of the term “crypto asset securities” in its lawsuits. 

• Crypto market participants watch the SEC’s next steps closely as Ripple CLO previously stated that the regulator’s use of the term likely misleads judges in crypto lawsuits and “has no legal basis.” The term “crypto asset securities” implies that crypto tokens are inherently securities.

• The SEC clarified its usage of the term and said it “regrets any confusion” caused by its use by amending footnotes in its lawsuit against Binance. 
• The SEC’s statements in 2017 and 2024, seven years apart, are contradictory, per Stuart Alderoty. Ripple’s CLO points out in a tweet that the SEC admits that the term “crypto asset security” is not real. Alderoty believes that the regulator likely used the term to prove that “crypto asset security” is an investment contract and the SEC needed evidence of "contracts, expectations, and understandings.”

• The SEC’s definition of securities and how it applies to crypto is important to traders since it is considered when determining whether a crypto token is a “security.” XRP gained legal clarity as a non-security when Judge Torres ruled that the altcoin is not an investment contract when traded on secondary markets or exchanges. 
• Another market maker likely influencing XRP price is Grayscale’s announcement on Thursday of an investment trust for the asset. Institutional capital inflow could boost the adoption and demand for XRP Ledger’s native asset, likely driving gains. 

Technical analysis: XRP could rally 9% and target $0.6217

Ripple has been in a downward trend since its July 2023 top of $0.9380. Since then, the altcoin reached a low of $0.3823 in July 2024. XRP recovered somewhat afterwards, but in the last few months it has traded broadly sideways within a range between $0.6586 and $0.4319. 

XRP trades at $0.5695 on Friday and could gain 9% if it reaches $0.6217, which aligns with the upper boundary of the Fair Value Gap (FVG) in the XRP/USDT daily chart. 

The Moving Average Convergence Divergence (MACD) indicator shows green histogram bars above the neutral line, suggesting underlying positive momentum in XRP. 

XRP/USDT daily chart

If the altcoin’s price declines, it could find support in the FVG between $0.5337 ad $0.5428. These levels have acted as support throughout August and September.