Five Things to Know in Crypto This Week: XRP Not a Security, Sometimes

Key Insights:

• The crypto market and the NASDAQ Composite Index saw similar gains from Monday to Friday but for different reasons.
• Court ruled XRP is not a security, sometimes.
• Coinbase rebounded on XRP Programmatic Sales ruling.

Crypto Market Set to Resume Upward Weekly Winning Trend

It was a range-bound Monday to Wednesday for the crypto market. Significantly, the crypto market brushed aside US economic indicators mid-week that fueled bets on the Fed hitting the brakes after the summer.

The US CPI Report raised the bets of the Fed ending its monetary policy tightening cycle after a final July rate hike. In June, the US annual inflation rate softened from 4.0% to 3.0%. Wholesale inflation numbers supported the shift in Fed expectations, with the Producer Price Index rising by 0.1% year-over-year versus 0.9% in May.

Disinflation supported the NASDAQ Composite Index, which ended the week up 3.32% to 14,114.

In contrast, the crypto market needed a catalyst to break the resistance barriers amidst increasing scrutiny of the digital asset space.

Judge Torres, the presiding Judge in the SEC v Ripple case, caught the markets by surprise. On Thursday, Judge Torres ruled that XRP is not a security in Programmatic Sales on exchanges.

Investors responded favorably to the news, with the total crypto market cap reaching $1,239 billion before a pullback to end Friday at $1,178 billion. Monday to Friday, the crypto market cap increased by 3.51%.

XRP Hit $0.93 in Reaction to the SEC v Ripple Court Ruling

It was a big week for Ripple and XRP. As investors resigned themselves to a post-summer Court ruling from the SEC v Ripple case, Judge Analisa Torres caught the crypto markets with a surprise ruling on Thursday.

Judge Torres ruled that XRP Programmatic Sales are not securities, while direct XRP sales to institutional investors and ODL users meet elements of the Howey Test and are, therefore, securities.

Judge Torres grouped institutional investors with ODL users despite ODL users holding XRP for seconds and solely for remittance purposes. However, Ripple has been growing its business overseas because of the SEC v Ripple case, which should limit the impact of such a ruling on the Ripple business.

Ripple CTO David Schwartz had this to say,

“We’re still figuring this out. We don’t currently have ODL-related sales with a US nexus, and not being able to do so is not really a huge deal. We can still do OLD in the US, as long as XRP is never sourced from Ripple.”

For XRP and the broader market, the threat of an SEC appeal against the Court ruling on Programmatic Sales added to the bearish mood on Friday.

Despite the Friday pullback, XRP was up 53.32% to $0.7180, Monday through Sunday morning.

SEC v Coinbase Case Just Got Interesting

On June 6, the SEC filed charges against Coinbase (COIN). According to the SEC press release, the SEC alleged Coinbase operates as an unregistered securities exchange broker and clearing agency.

Additional charges included the unregistered offering and selling of securities in connection with its staking-as-a-service program.

At the time of the filing, SEC Chair Gary Gensler had this to say,

“We allege that Coinbase, despite being subject to securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearing house functions.”

Senator Bill Hagerty responded to the charges, saying,

“The SEC is weaponizing their role to kill an industry. Allowing a company to list publicly and then stonewalling their attempts to register is indefensible.”

Coinbase shares surged as investors responded to the SEC v Ripple Court ruling. Monday through Friday, COIN ended the week up 33.8% to $105.31. Notably, Coinbase reviewed the SEC v Ripple Court ruling and relisted XRP on July 14.

Binance.US, Binance, and CEO CZ Not Out of the Woods

While the SEC v Ripple Court rulings favor Coinbase, Binance.US Binance, and Binance CEO CZ are unlikely to dodge the SEC charges.

The SEC charges against Binance.US, Binance, and Binance CEO CZ look beyond the illegal sale of securities. There are 13 SEC charges, including lack of disclosure and the calculated evasion of the law.

However, Binance.US may now have confidence in eliminating the charges of illegally selling securities, which could put the option of a settlement on the table. However, the SEC could appeal and scupper the chance to settle out of Court.

The SEC filed charges against Binance.US, Binance, and Binance CEO CZ one day before filing charges against Coinbase.

Uncertainty toward the SEC v Binance case left binance coin (BNB) trailing the crypto front runners.

Monday through Saturday morning, BNB was up 7.60% to $252.0.

Bitcoin ETFs, Taxpayers Money, and Bipartisan Crypto Legislation

While the XRP Community and the targeted altcoins and exchanges breathed a sigh of relief, investors may need to consider the implications of the ruling on the SEC and its approach toward the US digital asset space.

Among the considerations for investors:

• The SEC could reject one, some, or all the BTC ETF applications.
• Appeal the Judge Torres Court ruling at the expense of taxpayers’ money.
• Whitehouse support to quash attempts to introduce legislation to address much-needed regulatory clarity.

On Wednesday, Senator Cynthia Lummis introduced a new crypto bull to deliver a regulatory framework. Senator Lummis had this to say about the bill,

“Today, Senator Gillibrand and I are reintroducing landmark legislation to create a federal regulatory framework that allows crypto business and investors to prosper here in America while protecting consumers from bad actors.”

Calls for lawmaker involvement to address a regulatory void will likely build in the coming weeks. Ripple CEO Brad Garlinghouse called on lawmakers to act, saying,

“Hoping yesterday’s decision is the wake-up call that Congress needs. This ruling directly undercuts the SEC’s claims that nearly all tokens are inherently securities – likely to set a positive precedent for other digital tokens in the US.”