XRP holders wonder how SEC will treat Ripple as Ethereum gets free pass
- Ripple holders react to news of the US SEC dropping its investigation into Ethereum, expecting a similar treatment for the altcoin.
- Ripple’s Chief Legal Officer Stuart Alderoty poses questions as holders digest the SEC’s decision.
- XRP price ticks up on Thursday amidst speculation of the SEC’s next steps in the lawsuit against Ripple.
Ripple (XRP) holders debate the future of the altcoin on Thursday, which could be closely related to the US Securities and Exchange Commission’s (SEC) next step following its decision to end the investigation into Ethereum (ETH).
XRP edges up slightly on Thursday as the pro-Ripple community hopes for a similar treatment by the US regulator.
Daily digest market movers: Ripple holders hope for SEC U-turn
- US SEC dropped their investigation into Ethereum, Consensys founder Joseph Lubin said on Wednesday.
- The SEC’s decision was slammed by the XRP holder community and pro-Ripple attorney Bill Morgan, who said that Ethereum and Ripple’s different treatment will show how arbitrary the SEC has been in crypto.
- XRP community members on X are debating whether the SEC will treat Ripple in the same way as Ethereum. Trader behind the X handle @XRPcryptowolf asks the community why the SEC withdrew its lawsuit against Ethereum Consensys but not the XRP case.
Why did the SEC withdraw the lawsuit against Ethereum Consensys but not the $XRP case?
— XRPcryptowolf (@XRPcryptowolf) June 19, 2024
- Ripple’s Chief Legal Officer Stuart Alderoty raised questions on the SEC’s treatment of Ethereum. Alderoty acknowledged the SEC’s decision as a win for Ethereum developer Consensys and noted that several questions remain unanswered: “Does this mean the SEC thinks Consensys’ offers and sales of ETH are not securities transactions and/or that ETH itself is not a security? What will [SEC Chair Gary] Gensler say if now asked? What is the status of MetaMask and staking?”
A big win for Consensys, though questions remain. Does this mean the SEC thinks Consensys’ offers and sales of ETH are not securities transactions and/or that ETH itself is not a security? What will Gensler say if now asked? What is the status of MetaMask and staking?
— Stuart Alderoty (@s_alderoty) June 19, 2024
This is…
- Crypto analyst and influencer behind the handle @CryptoWendyO asked why Ripple is in legal trouble with the SEC but not Ethereum.
Why is Ripple in trouble but not Ethereum?
— Wendy O (@CryptoWendyO) June 19, 2024
Technical analysis: XRP gains nearly 1%, defying concerns surrounding SEC’s free pass to Ether
XRP gained nearly 1% on Thursday, as seen on the daily chart. The altcoin is trading at $0.4963 on Binance at the time of writing, gaining nearly 1% in the past seven days but losing nearly 8% in the past 30 days.
The Moving Average Convergence Divergence (MACD) line crossed over the signal line, with green histogram bars flashing above the neutral line, supporting a bullish thesis for XRP. If this upside scenario unfolds, Ripple could rally towards resistance at $0.5326, coinciding with the June 5 high.
XRP/USDT 1-day chart
On the contrary, if Ripple closes under $0.4665, the April 19 low, it could invalidate the bullish thesis. XRP could find the next support at the June 7 low of $0.4508.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14: 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 will need to keep litigating over the around $729 million it received under written contracts.
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 are likely to 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.
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
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.
