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XRP News Today: Ripple’s Legal Woes Intensify with SEC’s Latest Court Filings

By:
Bob Mason
Updated: Jun 15, 2024, 04:12 GMT+00:00

Key Points:

  • On Friday (June 14), XRP fell by 0.71%, ending the session at $0.4773.
  • The SEC filed its response to the Ripple Notice of Supplemental Authority, justifying its pursuit of an almost $2 billion penalty and an injunction.
  • On Saturday (June 15), SEC vs. crypto case-related chatter and SEC news warrant investor attention.
XRP News Today

In this article:

The Friday Overview

On Friday (June 14), XRP fell by 0.71%. Following a 3.01% loss on Thursday (June 13), XRP ended the session at $0.4739. Significantly, XRP visited sub-$0.46 for only the third time in 2024.

SEC vs. Ripple: SEC Responds to Ripple Notice of Supplemental Authority

On Friday, SEC vs. Ripple case-related activity drew interest.

The SEC filed with the courts its response to the Ripple Notice of Supplemental Authority, arguing that settlements are not comparable in penalty size to litigated cases.

Furthermore, the SEC shared its considerations when determining the Terraform Labs settlement, stating,

“Ripple fails to note that the corporate defendant there is in bankruptcy, going out of business for good, burning the keys to all of its crypto asset securities, agreeing to return a significant amount to investors in those securities, and removing two of the board members in charge at the time of the violations. The SEC took all of these factors in agreeing to a settlement, and repeatedly cited them as the facts relevant for the court to approve the settlement.”

The SEC added,

“Ripple is agreeing to none of this relief – in fact, Ripple is agreeing to nothing. […] Resolutions where cash-strapped defendants agree to return funds to victims quickly and voluntarily cease their violative conduct are unhelpful to deciding the amount of penalties necessary to punish and deter an undisputedly wealthy defendant who fails to recognize or acknowledge its violation of the securities laws, and who continues to enrich itself by engaging in conduct awfully similar to the conduct that resulted in the violation in the first place.”

The SEC referred in its March court filing to post-complaint activity. In the remedies-related opening brief, the SEC alleged that Ripple continued to break US securities laws after the December 2020 complaint.

Ripple Penalty Hinged on Interpretation of Post-Complaint Activity

In April, Ripple contested the allegations of post-complaint breaches of US securities laws in its reply brief, stating that its counterparties qualify as accredited investors and that it limited post-complaint XRP sales to ODL sales. Ripple clarified that its ODL contracts protect buyers from losses and prevent them from earning profits.

The Howey Test states that an investment contract is the investment of money in a common enterprise, with a reasonable expectation of profits to be derived from the efforts of others. The ODL agreements prevent profits. Considering the ODL agreements, Ripple provided the court with arguments that post-complaint activity did not breach US securities laws.

Nevertheless, it will come down to the court’s interpretation of post-complaint activity. In a February court ruling on the SEC Motion to Compel, Judge Sarah Netburn surmised,

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

In March, the SEC filed its remedies-related opening brief, presenting the courts with arguments for an almost $2 billion penalty and an injunction prohibiting XRP sales to institutional investors.

An injunction could materially affect Ripple’s expansion plans for the US.

XRP Price Action

XRP Weekly Chart sends bearish price signals.
XRPUSD 150624 Weekly Chart

Daily Chart

XRP sat well below the 50-day and 200-day EMAs, confirming the bearish price trends.

An XRP return to the $0.48 handle could support a move to the trend lines. Furthermore, a break above the trend lines could signal a climb to the 50-day EMA.

SEC vs. crypto case-related chatter requires investor attention after the recent filings in the Ripple case.

Conversely, an XRP fall through $0.47 could bring the $0.45 handle into play.

The 14-day RSI reading, 35.16, indicates an XRP drop below $0.47 before entering oversold territory.

Daily Chart affirms bearish price signals.
XRPUSD 150624 Daily 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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