XRP News: Crypto Legal Community Reacts to Reports of Illegal SEC Activity

Bob Mason
Published: Nov 1, 2023, 03:28 GMT+00:00

The crypto community reacted to a federal agency review of SEC activity within the digital asset space, relating to crypto custody rules, alleging illegal actions.

XRP News

In this article:

Key Insights:

  • XRP ended the Tuesday session at $0.6000, marking a 4-session winning streak.
  • A new federal agency report raises questions about the SEC and its targeted approach to crypto space.
  • On Wednesday, SEC v Ripple and Coinbase case-related news will remain focal points.

The Tuesday Overview

On Tuesday, XRP gained 3.79%. Following a 3.96% rally on Monday, XRP ended the day at $0.6000. Notably, XRP extended the winning streak to four sessions.

SEC Activity Drew Investor Interest on Tuesday

On Tuesday, there was no SEC v Ripple case-related news to influence the buyer appetite for XRP. The lack of activity left the crypto community to consider SEC action.

The crypto community reacted to a US Government Accountability Office (GAO) report on the SEC and its oversight of the crypto space.

Amicus Curiae attorney and CryptoLaw US founder John E. Deaton had this to say,

“This is a clear statement from a federal agency that the SEC broke the law. Ever since the Ripple lawsuit, the SEC has consistently NOT followed the law. A federal judge literally stated that the SEC’s enforcement lawyers, and the leadership they report to, are not only hypocrites, but they also lack a faithful allegiance to the law.”

Deaton added,

“It was an incredible statement for a federal judge to make. I was shocked at the little attention MSM paid to such a shocking statement. Here’s what I can say with great conviction. Today, the SEC does more to hurt investors than it does to protect investors. It has become both an inept and corrupt organization. Full stop.”

Blockchain Association Chief Policy Officer Jake Chervinsky shared the report, saying,

“This is huge. The GAO reviewed SAB 121, an illogical anti-crypto accounting bulletin issued by the SEC last March, and found that it’s a rule under the CRA and APA. The SEC didn’t comply with either. This is a clear statement from a federal agency that the SEC broke the law.”

Chervinsky went on to say,

“SAB 121 basically required crypto custodians to double-count digital asset liabilities on their balance sheets. It has done extraordinary damage to the crypto industry and cost untold millions in legal and consulting fees over the last 18 months. It was illegal from the start.”

Chervinsky concluded,

“The SEC should immediately withdraw SAB 121. If it does not, the GAO’s analysis makes a slam dunk out of a lawsuit against the SEC alleging a violation of the APA’s notice-and comment requirement. The Blockchain Association will be watching closely to see what the SEC decides to do next.”

The timing of the report coincides with pending court dates in the SEC v Ripple and SEC v Coinbase cases.

Ripple Chief Legal Officer Stuart Alderoty had this to say about the GAO Analysis,

“While Mr. Gensler is making bad Halloween jokes on X, his agency is being shamed for ignoring the law that requires agency rules to be reviewed by Congress. Seems the SEC has become the lawless Wild West Gensler loves to talk about so much.”

An SEC response and reaction from US lawmakers will draw investor interest. The threat of watering down the SEC’s freedom to oversee the digital asset space would be a boon for the crypto market.

SAB 121

SAB 121 requires financial institutions (FI) to hold customer crypto assets on their balance sheets. By holding client crypto assets on their balance sheets FIs must hold appropriate capital against the crypto assets held.

In June 2022, Senators Bill Hagerty, Thom Tillis, Cynthia Lummis, Mike Crapo, and Mike Rounds sent a letter to SEC Chair Gary Gensler. The Senators raised concerns about the agency’s ‘attempt to circumvent the rulemaking process required under the Administrative Procedure Act by issuing staff guidance concerning the accounting of and disclosures relating to the custody of digital assets.’

XRP Price Action

Weekly Chart sends bullish price signals.
XRPUSD 011123 Weekly Chart

Daily Chart

XRP remained above the 50-day and 200-day EMAs, affirming bullish price signals.

An XRP move through the Tuesday high of $0.6217 would support a break above the $0.6354 resistance level to target $0.65.

US lawmaker reaction to the US GAO Report and SEC v Ripple and Coinbase case-related news will be focal points.

However, an XRP fall through the $0.5835 support level would bring the trend line into play.

The 72.85 14-day RSI reading shows XRP in overbought territory, suggesting a likely pickup in selling pressure.

XRP Daily Chart affirms bullish price signals.
XRPUSD 011123 Daily Chart

4-Hourly Chart

In the 4-hourly Chart, XRP sits above the 50-day and 200-day EMAs, reaffirming bullish price signals.

An XRP return to $0.62 would support a break above the $0.6354 resistance level to target $0.65.

However, a fall through the $0.5835 support level would bring the trend line into view.

The 4-hourly RSI, with a reading of 65.28, suggests an XRP return to $0.62 before entering overbought territory.

XRP 4-Hourly Chart reaffirms bullish price signals.
XRPUSD 011123 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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