XRP trades above $0.55, confusion in appeals deadline could jeopardize SEC vs. Ripple lawsuit
- XRP exchanges hands above $0.55 on Thursday, gains nearly 1%.
- Market participants digest the confusion over a missed appeals deadline in SEC vs. Ripple lawsuit.
- SEC spokesperson confirms that the appeal will proceed normally and the documents with legal arguments will be filed publicly soon.
Ripple (XRP) gains on Thursday as traders digest the uncertainty in the Securities & Exchange Commission’s (SEC) appeal in the lawsuit. A spokesperson from the US-based financial regulator has confirmed that the process has been followed and the relevant documents will be available publicly soon.
XRP traded at $0.5507 at the time of writing on Thursday.
Daily Digest Market Movers: SEC’s appeal to go as planned in Ripple lawsuit
- The SEC made headlines early on Thursday for confusion over the deadline to file an appeal against the final ruling in the Ripple lawsuit.
- The SEC filed an appeal against the $125 million settlement and raised questions about the Howey Test’s application to XRP. This test is used to identify whether a token is a security and whether federal securities laws apply to it within the SEC’s jurisdiction.
- Ripple’s Chief Legal Officer, Stuart Alderoty, and CEO Brad Garlinghouse slammed the SEC for appealing the August 2024 ruling.
- Confusion over the deadline for filing an appeal raised the question of whether the SEC’s appeal is valid and will be accepted in the lawsuit.
- A Fox Business journalist, Eleanor Terret, said on the X social media site that an SEC spokesperson has affirmed that the appeals process is moving forward as planned and the documents will soon be publicly available.
NEW: Heard back from the @SECGov this morning.
— Eleanor Terrett (@EleanorTerrett) October 17, 2024
According to a spokesperson:
“The appeal is proceeding normally, and the documents will be filed publicly soon."
Technical analysis: XRP eyes 8% gain in its path to $0.60 target
XRP has been in a downward trend since July 2023, as seen in the XRP/USDT daily chart. The altcoin could climb another 8.42% to hit its psychologically important level at $0.60. This is a key level for several XRP holders since the token has managed to break through on a few occasions since May 2024.
The $0.60 level is considered a hurdle in the path to further gains, toward the $0.7429 target that coincides with the July 2023 peak for XRP.
XRP/USDT daily chart
If Ripple closes below the $0.5000 level on Thursday, it would invalidate the bullish thesis. This is a level where XRP has swept liquidity on several occasions. Therefore, it is a key support for the altcoin.
Another key support is the July 5 low of $0.3823. If XRP’s correction ensues, the altcoin could dip to this level before attempting a recovery.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token. While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at. Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say. Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation. While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
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.
