Ripple lawsuit to see SEC response on Monday, XRP nears 4.5 million mark in liquidity pools
- Ripple locked in liquidity pools on the Automated Market Maker crossed 4.5 million on Monday.
- SEC vs. Ripple lawsuit to see filing from the regulator by May 6 deadline.
- XRP touches high of $0.53, climbs towards $0.57 target is likely.
Ripple (XRP) closed above $0.52 on Sunday and resumed its climb on Monday, May 6. Sentiment among market participants is positive as traders await Securities and Exchange Commission (SEC) response filing and XRP locked in Automated Market Maker (AMM) liquidity pools crosses 4.31 million.
Daily Digest Market Movers: Ripple holders positive on Monday, led by these catalysts
- Ripple holders are awaiting the SEC’s response filing by the May 6 deadline.
- The SEC alleges Ripple of unregistered securities sale and has asked the court to levy a $2 billion fine on the payment remittance firm.
- The financial regulator and Ripple are arguing on what the latter labels “new expert materials,” and the SEC defends as facts and statements from SEC Assistant Accountant Andrea Fox.
- Ripple defended its motion to “strike new expert materials” and the SEC is expected to file its response on Monday.
- The court is expected to rule on the matter of the penalties imposed on the payment firm in May.
- Another key catalyst influencing XRP price is AMM on the XRPLedger that offers a passive income to participants.
- Data from XRPscan shows that over 4.31 million XRP tokens have been staked in liquidity pools on the AMM. This marks an important milestone for Ripple and the rise in staked XRP shows rising confidence among XRP holders.
Total XRP Locked in AMM
Technical analysis: XRP likely to climb towards $0.57 in upward trend
Ripple closed above $0.52 on Sunday. The altcoin resumed its upward trend on Monday, hitting a high of $0.53, at the time of writing. XRP is making steady progress towards its April 22 peak of $0.57. The altcoin faces resistance at $0.55, the 61.8% Fibonacci retracement level of the decline from April 9 top of $0.6431 to April 13 low of $0.4188.
The Moving Average Convergence Divergence (MACD) indicator shows green histogram bars above the neutral line, combined with the recent crossover of MACD above the signal line, it supports XRP price recovery.
XRP/USDT 1-day chart
XRP price needs to close above $0.53, the 50% Fibonacci retracement level of the decline between April 9 and 13, to sustain its uptrend. A close below this level could invalidate the bullish thesis and XRP could dip to support at $0.4868, a level that acted as support on the weekly time frame.
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.
