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XRP News: SEC’s Ripple Lawsuit and Coinbase Verdict Implications

By:
Bob Mason
Published: Feb 22, 2024, 02:06 UTC

Key Points:

  • On Wednesday, XRP declined by 2.22%, ending the session at $0.5497.
  • A broad-based crypto reversal left XRP in negative territory, with BTC-spot ETF market data impacting investor sentiment.
  • On Thursday, the ongoing SEC v Ripple case will remain a focal point, with SEC activity and the SEC case against Coinbase also needing consideration.
XRP News

In this article:

The Wednesday Overview

On Wednesday, XRP declined by 2.22%. Following a 0.09% loss on Tuesday, XRP ended the Wednesday session at $0.5497.

BTC-Spot ETF Market Flows Impact Investor Sentiment

XRP tracked the broader market into the negative territory on Wednesday. A sharp pullback in BTC-spot ETF market inflows affected buyer demand for crypto.

XRP tracks the broader crypto market.
Crypto Market XRP Correlation 220224 Hourly Chart

On February 20, net inflows fell from $323.9 million to $135.6 million, the lowest since February 6.

BTC ended the Wednesday session down 0.74%, with the total crypto market cap down 0.99% to $1,915 billion.

However, XRP underperformed the broader market. The ongoing SEC v Ripple case remained a headwind.

SEC v Ripple: Remedy-Related Brief Filings, Coinbase, and Empower Oversight

On Wednesday, there were no SEC v Ripple case-related updates to influence XRP. The SEC and Ripple completed remedies-related discovery on Tuesday. By March 13 and April 12, the SEC and Ripple must file remedy-related briefs to argue for and against a punitive penalty.

In July, Judge Analisa Torres ruled Ripple breached Section 5 of the US Securities Act for selling XRP to institutional investors.

With the SEC and Ripple working on remedy-related briefs, there is unlikely to be court activity between now and March 13. However, SEC plans to appeal the Programmatic Sales of XRP ruling remains a focal point and an XRP headwind.

Several external influences could affect SEC plans to appeal the Programmatic Sales of XRP ruling. These include a ruling on the Coinbase (COIN) Motion to Dismiss (MTD) and an Office of Inspector General investigation into crypto conflicts of interest within the SEC.

SEC v Coinbase: Motion to Dismiss Ruling Awaited

Coinbase filed a Motion to Dismiss in August, arguing the SEC lacks the statutory authority to regulate US crypto exchanges. Judge Katherine Failla heard oral arguments on January 17. Legal experts believed that Coinbase delivered a better argument, tilting the scales in Coinbase’s favor.

The SEC will likely appeal the ruling if Judge Failla grants the Motion to Dismiss. Nonetheless, the ruling could force the SEC to stop regulating crypto exchanges pending appeal. US lawmakers would likely expedite legislation to protect US retail investors.

An SEC loss to Coinbase could give the Lummis and Gillibrand Responsible Financial Innovation Act more chance of success. Senators Cynthia Lummis and Kirsten Gillibrand filed the bill in 2022 to foster innovation while protecting investors. Significantly, the bill would give the CFTC more oversight over the US digital asset space.

Legal experts believe a Coinbase victory could also force the SEC to settle the case against Ripple. A settlement would remove the option to appeal against court rulings in the case.

Empower Oversight, Bill Hinman, and the Ripple Case

The OIG is nearing an end to investigations into crypto-related conflicts of interest within the SEC. In 2022, Empower Oversight reported conflicts of interest relating to former SEC Director William Hinman.

Empower Oversight reported the matter to the OIG after filing a lawsuit against the SEC, claiming former SEC officials acted biasedly against XRP and Ripple.

Significantly, Empower Oversight alleged Hinman received millions of dollars from his former employer, Simpson Thacher. Hinman returned to Simpson Thacher after leaving the SEC.

If the OIG finds a conflict of interest, SEC Chair Gensler could face increasing pressure to settle the Ripple case.

William Hinman was a focal point in the SEC v Ripple case and the July court ruling. Hinman famously said bitcoin (BTC) and ethereum (ETH) are not securities. Speech-related documents revealed the Ethics division warned Hinman against meeting with his former employer. Hinman continued to meet with Simpson Thacher despite the warnings.

XRP Price Action

Weekly Chart sends bearish near-term price signals.
XRPUSD 220224 Weekly Chart

Daily Chart

XRP sat below the 50-day and 200 EMAs, sending bearish price signals.

An XRP break above the $0.5470 resistance level and 50-day EMA would bring the 200-day EMA into play. A move through the 200-day EMA would give the bulls a run at the $0.5835 resistance level.

SEC v Ripple and Coinbase case-related news and updates from the OIG investigation need consideration.

However, a drop below the $0.5350 handle would support a fall toward the $0.5042 support level.

The 14-day RSI reading, 50.69, suggests an XRP return to the $0.5835 resistance level before entering overbought territory.

XRP Daily Chart sends bearish price signals.
XRPUSD 220224 Daily Chart

4-Hourly Chart

On the 4-hourly, XRP sat below the 50-day EMA while holding above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

An XRP break above the $0.5470 resistance level and 50-day EMA would support a move toward the $0.5835 resistance level.

However, a break below the 200-day EMA would bring the $0.5042 support level into view.

The 4-hourly RSI, with a reading of 41.88, suggests an XRP drop below the $0.52 handle before entering oversold territory.

XRP 4-Hourly Chart sends bearish near-term price signals.
XRPUSD 220224 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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