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XRP News: SEC’s Ripple Lawsuit Nears Climax Amidst Appeal Prospects and Legal Moves

By:
Bob Mason
Updated: Feb 18, 2024, 04:19 UTC

XRP's price movement oscillates amidst legal turbulence, highlighting the intricate interplay between regulatory actions and market sentiment.

XRP News

Key Insights:

  • XRP declined by 2.69% on Saturday, ending the session at $0.5497.
  • The SEC v Ripple case will enter the final leg next week, while the focus remains on SEC plans to appeal against the Programmatic Sales of XRP ruling.
  • On Sunday, US lawmakers, the SEC, and SEC v crypto case-related chatter need consideration.

The Saturday Overview

On Saturday, XRP declined by 2.69%. Reversing a 0.44% gain from Friday, XRP ended the session at $0.5497. Significantly, XRP ended a three-day winning streak.

SEC v Ripple: Remedy Reply Briefs Are Up Next

There were no SEC v Ripple case-related updates to impact the buyer appetite for XRP on Saturday. On Monday, remedies-related discovery will end. The SEC and Ripple will then prepare remedy-related briefs.

The SEC will argue for a punitive penalty to deter breaches of US Securities Laws. On February 5, Judge Sarah Netburn granted the SEC Motion to Compel. Significantly, Judge Netburn ruled on the SEC request for post-complaint contracts governing XRP sales to institutional sales, stating,

“The SEC credibly argues that the District Judge may consider post-complaint conduct when determining whether an injunction is necessary and just.”

Judge Netburn also said that proceeds from post-complaint XRP sales to institutional investors could influence the remedy.

Considering the court ruling on the Motion to Compel, post-complaint XRP sales to institutional investors may materially influence the quantum of the penalty.

The SEC will attempt to demonstrate post-complaint breaches of Section 5 of the US Securities Act. According to the court briefing schedule, the SEC must file the remedy-related brief by March 13.

US Case Law and the Ripple Remedy-Related Brief

However, US case law also needs consideration. Ripple will argue that the SEC only has jurisdiction over XRP sales to US institutional investors. In the case, Morrison v NAB, the US Supreme Court ruled the SEC only has jurisdiction over US-based sales. Ripple will present total proceeds from XRP sales to institutional investors and to US institutional investors.

There is also the matter of financial harm to US institutional investors. In SEC v Govil, the 2d Circuit Court ruled that the SEC cannot demand a punitive disgorgement without proving investors suffering financial losses.

Finally, Ripple may also seek exemption to Section 5 of the Securities Act if Ripple can demonstrate XRP sales were to accredited investors.

Ripple must file the remedy-related brief by April 12. The SEC can file a reply brief by April 19. A reply brief would allow the SEC to present arguments against the Ripple remedy-brief and strengthen arguments from the SEC remedy-related brief.

The level of interest in the SEC v Ripple case is significant. However, SEC plans to appeal against the Programmatic Sales of XRP ruling remain the focal point.

An ongoing investigation into crypto conflicts of interest within the SEC could dictate whether the SEC will file an appeal.

XRP Price Action

Weekly Chart sends bullish price signals.
XRPUSD 180224 Weekly Chart

Daily Chart

XRP hovered below the 50-day and 200-day EMAs, sending bearish price signals. XRP fell through the 200-day and 50-day EMA on Saturday.

An XRP break above the 50-day EMA would support a move to the 200-day EMA. A move through the 200-day EMA would bring the $0.5835 resistance level into play.

SEC v Ripple case-related chatter and SEC activity warrant investor attention.

However, a drop below the $0.5470 support level would support a fall toward the $0.5042 support level.

The 14-day RSI reading, 54.74, suggests an XRP break above the 200-day EMA before entering overbought territory.

XRP Daily Chart sends bearish price signals.
XRPUSD 180224 Daily Chart

4-Hourly Chart

On the 4-hourly, XRP remained above the 50-day and 200-day EMAs, sending bullish price signals. Significantly, the 50-day EMA pulled away from the 200-day EMA after the bullish cross, another bullish signal.

A return to the $0.56 handle would give the bulls a run at the $0.5835 resistance level.

However, a break below the $0.5470 support level would bring the 50-day and 200-day EMAs into play. An XRP fall through the EMAs would give the bears a run at the $0.5042 support level.

The 4-hourly RSI, with a reading of 49.13, suggests an XRP fall to the $0.5042 support level before entering oversold territory.

XRP 4-Hourly Chart sends bullish price signals.
XRPUSD 180224 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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