Ripple CLO calls out US regulator for labeling crypto tokens as securities, SEC amends Binance lawsuit
- Ripple Chief Legal Officer Stuart Alderoty comments on SEC’s definition of crypto asset securities.
- SEC faces criticism for referring to crypto tokens as securities and apologizes for confusion in footnotes of Binance lawsuit.
- Alderoty points out inconsistencies in the SEC’s regulatory approach towards the crypto industry in 2017 and 2024, influencing the Ripple lawsuit.
- XRP gains over 1% on Friday, trades at $0.5695 at the time of writing.
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.
"The SEC regrets any confusion it may have invited" by falsely and repeatedly stating that tokens themselves are securities. This is the remarkable representation in Footnote 6 of @SECGov's Amended Complaint against Binance. I hope @s_alderoty is getting some good sleep tonight.… pic.twitter.com/PpbprvkGxh
— paulgrewal.eth (@iampaulgrewal) September 13, 2024
- 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 term 'crypto asset security' is nowhere to be found in any statute—it's a fabricated term with no legal basis. The SEC needs to stop trying to deceive judges by using it. pic.twitter.com/CyNbUbeoYM
— Stuart Alderoty (@s_alderoty) September 2, 2024
- 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.”
So the SEC finally admits that 1/ "crypto asset security" is a made up term and 2/ to prove a "crypto asset security" is an investment contract, the SEC needs evidence of a bundle of "contracts, expectations, and understandings"?
— Stuart Alderoty (@s_alderoty) September 13, 2024
Think it's time for @SECgov to admit it has… https://t.co/iJIYTnNvxs pic.twitter.com/E58Pft7irc
- 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.
Ripple FAQs
Ripple is a payments company that specializes in cross-border remittance. The company does this by leveraging blockchain technology. RippleNet is a network used for payments transfer created by Ripple Labs Inc. and is open to financial institutions worldwide. The company also leverages the XRP token.
XRP is the native token of the decentralized blockchain XRPLedger. The token is used by Ripple Labs to facilitate transactions on the XRPLedger, helping financial institutions transfer value in a borderless manner. XRP therefore facilitates trustless and instant payments on the XRPLedger chain, helping financial firms save on the cost of transacting worldwide.
XRPLedger is based on a distributed ledger technology and the blockchain using XRP to power transactions. The ledger is different from other blockchains as it has a built-in inflammatory protocol that helps fight spam and distributed denial-of-service (DDOS) attacks. The XRPL is maintained by a peer-to-peer network known as the global XRP Ledger community.
XRP uses the interledger standard. This is a blockchain protocol that aids payments across different networks. For instance, XRP’s blockchain can connect the ledgers of two or more banks. This effectively removes intermediaries and the need for centralization in the system. XRP acts as the native token of the XRPLedger blockchain engineered by Jed McCaleb, Arthur Britto and David Schwartz.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
