SEC vs. Ripple: Speculation Grows Over Behind-the-Scenes Discussions
The SEC vs. Ripple case continues to draw market interest amid speculation of the SEC potentially dropping its appeal.
On Thursday, March 13, Fox Business Senior Correspondent Charles Gasparino expanded on reports of settlement talks between Ripple and the SEC, stating:
“One issue that is being weighed by the commission is whether XRP continues to trade and have a utility that makes it more a commodity and not a security. I am told the ethereum example is key; ETH was obviously issued as an ICO; its characteristics on issuance was no different than XRP–both used to finance the buildout of a platform, yet Ripple got sued and Ethereum didn’t because ETH had since morphed into a commodity.”
Gasparino added:
“What is being discussed now is the comparison between the 2 cryptos. The SEC believe Eth trades as pure commodity. They are trying to determine if the commission can make that case w XRP.”
Legal Exports and Crypto Media at Odds
His comments drew criticism from legal experts, given Judge Analisa Torres ruled that XRP, in itself, is not a security.
Pro-crypto lawyer Bill Morgan responded:
“No judge in the world that I am aware has found that a crypto itself is a security but can morph into a commodity. A judge however did find that XRP itself is not a security. The SEC knows about that finding and does not challenge it in the Appeal. Therefore, your speculation that what is being discussed now is the comparison between the XRP and ETH and whether XRP can trade as a commodity because it ‘morphed’ from a security to a commodity is highly unlikely to be correct.”
Morgan also highlighted inconsistencies in the SEC’s legal approach:
“It is also completely inconsistent with the SEC’s dropping of the other lawsuits which inevitably must be premised on the grounds cryptos are not securities and not traded in secondary markets as securities.”
SEC Dismissal of Coinbase Charges Crucial for the Ripple Case
Since President Trump appointed Commissioner Mark Uyeda as Acting SEC Chair, and with the establishment of the Crypto Task Force, the agency has ended enforcement actions. Significantly, the SEC dismissed its lawsuit against Coinbase (COIN). The SEC had charged Coinbase for operating as an unregistered securities exchange, broker, and clearing agency.
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See all Bitcoin forecastsThe dismissal raises questions about whether the SEC still considers the Howey test applicable to secondary market blind bid/ask transactions. Under this scenario, the SEC would have to take a similar view on the Programmatic Sales of XRP ruling, supporting an appeal withdrawal.
On March 12, Fox Business Journalist Eleanor Terrett reported that Ripple and the SEC were negotiating Judge Analisa Torres’ Final Judgment. Two key points of discussion are likely the $125 million penalty and the injunction requiring Ripple to comply with Section 5 of the Securities Act, particularly given the SEC’s evolving stance on crypto regulation.
XRP Price Trends: Appeal Speculation Boosts Demand
On Thursday, March 13, XRP rose 0.59% after Wednesday’s 3.13% gain, closing at $2.2530. Significantly, XRP outperformed the broader market, which dropped by 2.34% to a total crypto market cap of $2.61 trillion.
Ongoing hopes for an SEC appeal withdrawal and the potential approval of XRP-spot ETFs bolstered XRP demand.
Key factors influencing XRP’s price outlook:
- US Strategic Reserve Asset: A push for a multi-crypto reserve could boost sentiment.
- SEC Appeal Strategy: If the SEC drops its appeal, XRP could surpass its all-time high of $3.55. However, prolonged legal uncertainty might drag prices below $1.50.
- XRP-Spot ETF Developments: Institutional inflows from an XRP ETF could drive prices toward $5, but ongoing legal issues may delay approval.
- Macro Risks: Trade tensions could push XRP toward the February low of $1.7938. Conversely, easing trade tensions and softer inflation could support a recovery toward $2.50.
Read expert analysis on what could drive XRP to new highs here.
US Tariff Policies Weigh on Bitcoin
While XRP advanced, escalating US-EU tariff tensions sent bitcoin (BTC) into negative territory.
The EU retaliated against Trump’s sweeping 25% tariffs on aluminum and steel with a 50% levy on US whiskey. In response, Trump threatened 200% tariffs on European wines and spirits, raising fears of a full-blown US-EU trade war. The tariff maneuvers and rhetoric contributed to risk-off sentiment, pressuring BTC to an intraday low of $79,956.
US BTC-Spot ETF Market Outflows Signal Weak Demand
On March 13, the US BTC-spot ETF market saw outflows resume after modest inflows of $13.3 million on March 12. According to Farside Investors:
- Fidelity Wise Origin Bitcoin Fund (FBTC) saw net outflows of $75.5 million.
- ARK 21Shares Bitcoin ETF (ARKB) had net outflows of $60.2 million.
- Excluding iShares Bitcoin Trust (IBIT) data, the US BTC-spot ETF market reported $180.9 million in net outflows, pressuring BTC.
BTC-spot ETF flow trends remain crucial for bitcoin’s supply-demand balance and price trajectory. Sustained net outflows since mid-February have pressured BTC, keeping it well below its record high of $109,312.
Bitcoin Price Scenarios: Key Levels to Watch
On March 13, BTC slid by 3.07%, reversing Wednesday’s 0.92% gain to close at $81,136. Concerns about the US economy and tariffs fueling inflationary pressures remained key headwinds.
Potential price scenarios:
- Bearish: Rising trade tensions, opposition to the Bitcoin Act, and continued BTC-spot ETF outflows could pull BTC toward $70,000.
- Bullish: Easing trade tensions, growing support for the Bitcoin Act, and renewed ETF inflow trends could push BTC toward $109,312.
Senator Cynthia Lummis introduced the Bitcoin Act in December 2024, proposing the US government acquire one million BTC over five years, with a 20-year mandatory holding period.
Market Outlook: Key Drivers
Several macro and regulatory factors will influence crypto trends in the coming weeks:
- SEC Appeal Decision: An SEC withdrawal could trigger a broad crypto rally.
- US Tariff Policy: Higher tariffs could lead to a more hawkish Fed stance, increasing recession fears.
- US Economic Data: The University of Michigan Survey of Consumers will influence the Fed path and crypto volatility.
- Strategic BTC Reserve: Support for the Bitcoin Act could accelerate institutional adoption.
- BTC-Spot ETF Flows: Institutional demand remains a key driver of BTC price trends.
An SEC appeal withdrawal could fuel an XRP breakout, while long-term institutional confidence will hinge on greater regulatory clarity in the US.
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