XRP close to support at $0.50 as traders digest SEC vs. Ripple lawsuit proceedings
- Ripple and the SEC have filed their reply briefs and supporting evidence, awaiting the court’s ruling in the lawsuit.
- SEC’s redacted reply brief to Ripple, made public on Wednesday, continued to demand a hefty penalty of $2 billion.
- XRP is stuck below sticky resistance at $0.53 on Thursday.
XRP is ranging below $0.53 on Thursday as investors continue to digest the recent developments in the legal battle between Ripple and the US Securities and Exchange Commission (SEC).
Both parties have filed their final remedies-related briefs and replies, in which they continue to support their prior stances: While SEC demands a $2 billion fine, Ripple considers that this should amount to a maximum of $10 million. The judge is expected to rule on the case in May.
Daily Digest Market Movers: XRP legal proceedings draw to a close
- SEC vs. Ripple lawsuit has garnered much attention from XRP holders, as developments in the legal battle have impacted the altcoin’s price. Both parties have filed their remedies-related briefs, opposing briefs and responses. Redacted versions of the filings and the supporting evidence have been made publicly available on Wednesday.
- The court is expected to rule on the penalties to be imposed on Ripple for the alleged violation of securities laws in May.
- Attorney James Filan shared the recent redacted version of the SEC filing in a tweet on X:
#XRPCommunity #SECGov v. #Ripple #XRP The @SECGov has filed its redacted remedies reply brief & supporting exhibits.https://t.co/qZ6GTtSFmL
— James K. Filan (@FilanLaw) May 7, 2024
- Attorney Jeremy Hogan noted that the SEC did not comment on institutional sales of XRP, and observed that Ripple is trying to re-litigate. In Hogan’s words the SEC “went out without a whimper.”
The Ripple v. SEC briefs are FINISHED!
— Jeremy Hogan (@attorneyjeremy1) May 8, 2024
And I think the SEC went out with a whimper here.
It didn't even try to attack ODL sales, just noting that Ripple was trying to re-litigate the issue (which it is).
And it brought nothing new on damages.
Just waiting for The Judge now! https://t.co/r8nxNMTzqj pic.twitter.com/Futa93lXUb
- Attorney Bill Morgan pointed out that Ripple may have considered the worst-case scenario in the lawsuit, a permanent injunction on its ODL sales. Ripple is prepared for the court ordering the firm to stop its XRP ODL sales, and this is clear from the way that the payment remittance firm has structured its arrangements for the US and other jurisdictions where it holds licenses.
It is worth pointing out that Ripple’s current arrangements disclosed in the opposition brief of using USDT or other crypto in the US for ODL and using subsidiaries in other foreign jurisdictions pursuant to licences in those jurisdictions for ODL sales are structured in a way… https://t.co/42pFcj2Y3T
— bill morgan (@Belisarius2020) May 8, 2024
Technical analysis: XRP stuck below $0.53 on Thursday
Ripple is stuck between the $0.57 and $0.50 range for over one week. The altcoin faces sticky resistance at $0.53 at the time of writing, a level that represents the 50% Fibonacci retracement from the April 9 to April 13 sell-off.
In the weekly time frame, the $0.4665 level is a key support for XRP, and the $0.5630 is the key resistance level to beat.
The Volume Profile indicator shows that the point of control is at $0.6159, which acted as support throughout March. It corresponds to the highest volume of XRP traded in the daily chart. The Moving Average Convergence Divergence (MACD) indicator shows green histogram bars above the neutral line, implying positive momentum in Ripple’s upward trend that started on April 20.
XRP/USDT 1-day chart
Looking down, XRP could find support at the May 1 low of $0.4782. XRP could sweep liquidity at this level and attempt to recover from the recent decline in price.
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.
