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XRP News Today: SEC vs. Ripple Heats Up with SEC Opening Brief Filing

By:
Bob Mason
Published: Mar 27, 2024, 02:09 GMT+00:00

Key Points:

  • SEC remedy-related opening brief impacted buyer demand for XRP as investors considered a $2 billion penalty for XRP sales.
  • Beyond a punitive penalty, the SEC argued for the court to prohibit XRP sales to institutional investors.
  • On Wednesday, SEC vs. Ripple case-related news will remain the focal point.
XRP News Today

In this article:

The Tuesday Overview

On Tuesday, XRP declined by 1.39%. Reversing a 1.23% gain from Monday, XRP ended the session at $0.6314.

SEC vs. Ripple: SEC Slams Ripple Demanding a $2 Billion Penalty

On Tuesday, SEC vs. Ripple case-related updates garnered investor interest. As per the amended court briefing schedule, the SEC filed its remedy-related opening brief by March 22. The SEC released a redacted opening brief on March 26.

Before the redacted version, Ripple CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty warned about an SEC push for a $2 billion penalty. Nonetheless, XRP gave up gains from earlier in the Tuesday session as investors considered the possible impact of a $2 billion penalty on Ripple and XRP.

Defense attorney James Filan shared the redacted opening brief. On Monday, we highlighted the risk of a punitive penalty if Ripple continued breaching Section 5 of the 1933 Securities Act after the complaint.

The Remedy-Related Opening Brief Targets Post-Complaint Activity

In the preliminary statement of the opening brief, the SEC argued,

“Since the filing for the Complaint, Ripple has increased its sales of XRP. The amount of unregistered Institutional Sales discussed in the Summary Judgment Order – nearly $729 million – is staggering. Yet it pales in comparison to the more than (redacted dollar amount) in XRP sales that Ripple has made since the start of the lawsuit, including billions since the Summary Judgement Order, most or all, it seems, in sales akin to Institutional Sales.”

The reference to post-complaint XRP sales to institutional investors is significant. In February, Judge Sarah Netburn granted an SEC Motion to Compel, saying,

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

Judge Netburn added,

“Courts have no hesitation in concluding that, in calculating the size of a penalty necessary to deter misconduct, the extent of a defendant’s wealth is a relevant consideration.”

The SEC highlighted in the opening brief that Ripple is well positioned to pay a significant civil penalty, arguing that,

“A civil penalty should not just be the cost of doing business for a securities law violator, as the Second Circuit has held, and because the need for deterrence is clear given Ripple’s enormous amount of unregistered sales of XRP over the last three years.”

The SEC also highlighted Ripple’s failure to accept responsibility and public statements after the July 13, 2023, court ruling. saying,

“Ripple made a series of public statements mischaracterizing the ruling, among other things, as a “total victory” for Ripple.”

The SEC did not only go for a punitive disgorgement but also the jugular, arguing for the court to prohibit Ripple from selling unregistered XRP to institutional investors.

Sales of XRP to US and Global Institutional Investors

Seemingly, the opening brief did not distinguish between XRP sales to US and non-US institutional investors. In Morrison vs. NAB, the Supreme Court ruled that the SEC only has jurisdiction over US-based sales.

If all post-complaint XRP sales are to institutional investors outside the US, grounds to argue for a punitive penalty diminish significantly.

Ripple must file its remedy-related opposition brief by April 22 and avail a redacted version by April 24.

Further reaction to the SEC’s opening brief will draw investor interest. However, SEC plans to appeal the Programmatic Sales of XRP ruling remain an XRP headwind. In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test.

XRP Price Action

Weekly Chart sends bullish price signals.
XRPUSD 270324 Weekly Chart

Daily Chart

XRP hovered above the 50-day and 200-day EMAs, sending bullish price signals.

An XRP breakout from the $0.6609 resistance level could give the bulls a run at the $0.70 handle. A return to the $0.70 handle could signal an XRP move to the $0.7467 resistance level.

SEC vs. Ripple case-related chatter needs investor consideration.

Conversely, a drop below the $0.62 handle would bring the 50-day EMA into play. A break below the 50-day EMA could give the bears a run at the 200-day EMA and the $0.5740 support level.

The 14-day RSI reading, 52.76, indicates an XRP move to the $0.70 handle before entering overbought territory.

XRP Daily Chart sends bullish price signals.
XRPUSD 270324 Daily Chart

4-Hourly Chart

On the 4-hourly, XRP held above the 50-day and 200-day EMAs. The EMAs reaffirmed the bullish price trends.

An XRP return to the $0.65 handle would give the bulls a run at the $0.6609 resistance level.

However, a drop below the 50-day EMA could signal an XRP fall to the 200-day EMA and the $0.60 handle.

The 4-hourly RSI, with a reading of 51.19, suggests an XRP return to the $0.70 handle before entering overbought territory.

XRP 4-Hourly Chart affirms bullish price signals.
XRPUSD 270324 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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