XRP News: Amicus Curia Attorney Deaton Talks SEC v Ripple and Appeals

Bob Mason
Published: Feb 2, 2024, 02:10 GMT+00:00

Investors await the court ruling on the SEC Motion to Compel. If the Judge denies the motion, XRP should find some relief before the appeals process.

XRP News

Key Insights:

  • XRP gained 0.60% on Thursday, ending the session at $0.5057.
  • XRP tracked the broader market into positive territory as investors moved on from Wednesday’s fake news-fueled losses.
  • On Friday, US lawmaker scrutiny, and SEC v Ripple court rulings warrant investor attention.

The Thursday Overview

On Thursday, XRP gained 0.60%. Partially reversing a 1.64% loss from Wednesday, XRP ended the session at $0.5057.

Amicus Curiae Attorney John E Deaton Shares Views on the SEC v Ripple Case

On Thursday, Amicus Curiae attorney and founder of CryptoLaw US, John E Deaton, discussed the ongoing SEC v Ripple case.

Significantly, Deaton focused on the SEC Motion to Compel and Ripple’s opposition filing.

The SEC filed the Motion to Compel, asking the court to order Ripple to provide,

  • Financial statements for 2022/23.
  • Post-complaint contracts governing XRP sales to institutional investors.

Deaton said that Ripple could find an exception to Section 5 of the Securities Act, noting Ripple could demonstrate that XRP sales were to accredited investors.

Considering the previous rulings from the SEC v Ripple case, Deaton said.

“It is quite possible that Ripple would be able to show an exemption to the vast majority of those institutional sales. […] It’s quite possible that the Judge could fine Ripple something like $10 million.”

Deaton highlighted that the SEC’s biggest fear would be for Ripple to show a significant portion of sales were to accredited investors.

Importantly, Deaton believes the Judge will fine Ripple significantly less than the legal fees of circa $200 million.

Deaton talked about the Hinman speech-related documents, SEC Chair Gary Gensler, and the application of the pre-internet securities laws.

The CryptoLaw US founder continued to think there are no discussions about a settlement.

Deaton also discussed the possible outcomes and impact on XRP price trends, saying a hefty fine could adversely affect XRP. However, Deaton believes the size of the fine is unlikely to influence XRP.

About an SEC appeal, Deaton believes the Second Circuit Court would not overturn the appeal. Judge Torres went straight to the third factor of the Howey Test, which is the reasonable expectation of profits from Ripple. If the second circuit sends the case back to Judge Torres, Judge Torres could review the case and rule based on the second prong of the Howey Test, a Common Enterprise.

Deaton believes the programmatic XRP sales also failed to meet the second prong of the Howey Test.

XRP Price Action

Weekly Chart sends bearish price signals.
XRPUSD 020224 Weekly Chart

Daily Chart

XRP remained below the 50-day and 200-day EMAs, sending bearish price signals. On Thursday, the 50-day EMA crossed through the 200-day EMA, affirming bearish price trends.

An XRP return to the $0.52 handle would give the bulls a run at the $0.5470 resistance level.

US lawmaker chatter, SEC activity, and SEC v Ripple case-related updates need consideration.

However, a break below the $0.5042 support level would bring the $0.4700 support level into play.

The 14-day RSI reading, 34.41, suggests an XRP fall below the $0.50 handle before entering oversold territory.

XRP Daily Chart sends bearish price signals.
XRPUSD 020224 Daily Chart

4-Hourly Chart

On the 4-hourly, XRP sat below the 50-day and 200-day EMA. The EMAs reaffirmed the bearish price signals.

An XRP break above the 50-day EMA would give the bulls a run at the $0.5470 resistance level.

However, a break below the $0.5042 support level would support a fall toward the $0.4700 support level.

The 4-hourly RSI, with a reading of 43.12, suggests an XRP fall to the $0.48 handle before entering the oversold territory.

XRP 4-Hourly Chart affirms bearish price signals.
XRPUSD 020224 4-Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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