Five Things to Know in Crypto This Week: SEC Targets Uniswap as Ripple Gains Legal Edge

Bob Mason
Updated: Apr 13, 2024, 04:58 GMT+00:00

Key Points:

  • BTC-spot ETF market net outflows impact investor sentiment.
  • SEC adds Uniswap to a growing list of crypto lawsuits but takes another loss that could benefit Ripple.
  • The SEC vs. Ripple case became a talking point after the SEC loss in the US appellate courts.
Five Things to Know in Crypto This Week

In this article:

BTC-Spot ETF Market Offers No Comfort

BTC was heading for a second consecutive weekly loss. From Monday (April 8 to Saturday (April 13), BTC was down 2.95% to $67,374. A Friday (April 12) sell-off dragged BTC into negative territory for the current week.

BTC faces a second weekly loss.
BTC Weekly Chart 130424

BTC-spot ETF market flow data showed signs of wear and tear this week. Hopes faded of Grayscale Bitcoin Trust (GBTC) outflows subsiding. iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) saw total net inflows tumble week-on-week. According to BitMEX Research and Farside Investors,

  • GBTC saw total net outflows of $766.6 million in the week ending April 12, up from $737.8 million of net outflows in the previous week.
  • IBIT saw total net inflows tumble week-on-week from $811.2 million to $486.5 million.
  • FBTC registered total net inflows of $90.2 million in the week ending April 12, down from $395.1 million in the previous week.
  • The BTC-spot ETF market saw total net outflows of $82.8 million in the week ending April 12. In the previous week, the BTC-spot ETF market saw total net inflows of $484.3 million.

Several factors influenced investor sentiment throughout the week, impacting BTC-spot ETF flows.

On Wednesday, the US CPI Report sank bets on a June Fed interest rate cut. US producer prices suggested inflationary pressures were unlikely to soften, adding to expectations of a less dovish Fed rate path.

According to the CME FedWatch Tool, the chances of a 25-basis point June Fed rate cut fell from 50.8% to 27.3% in the week ending April 12.

Uncertainty about the BTC Halving Event was another headwind for investors to consider.

Investors appeared to be replaying previous investment moves in the lead-up to the heavily anticipated halving. The pullback from the March 14 all-time high of $73,808 comes despite the BTC-spot ETF market seeing total net inflows of $12,582.1 million since January 11.

SEC vs. Uniswap: Another Crypto Lawsuit

This week, Uniswap (UNI) became the newest target for the SEC. Hayden Adams, the Uniswap Chief Legal Officer, announced that Uniswap received a Wells notice, drawing criticism from the crypto community. Significantly, the SEC alleges the Uniswap Protocol web application and wallet breach US securities laws.

The Wells Notice comes shortly after the court ruling in the ongoing SEC v Coinbase (COIN) case.

Judge Katherine Failla partially granted the Coinbase Motion to Dismiss (MTD) in March. Judge Failla dismissed the charges relating to the Coinbase wallet. The SEC move could signal SEC attempts to muddy the crypto waters. A win against Uniswap could ensure that the Coinbase ruling does not set a legal precedent.

Uniswap was down 29.70% to $8.01 from Monday (April 8) to Saturday (April 13).

Uniswap sinks on SEC charges.
UNI Weekly Chart 130424

SEC vs. Ripple: Court Ruling Gives Ripple an Edge

XRP faces a third successive weekly loss. From Monday (April 8) to Saturday (April 13), XRP was down 8.08% to $0.5464. Significantly, XRP continued to underperform the broader crypto market, which fell by 5.61% to $2,372 billion.

The ongoing SEC v Ripple case remains an XRP headwind. Investors await a court ruling on the penalty Ripple must pay for breaching Section 5 of the 1933 Securities Act. In July 2023, Judge Analisa Torres ruled Ripple failed to register XRP as a security in sales to institutional investors.

In March, the SEC filed its remedy-related opening brief. The SEC alleged that Ripple continued to breach US securities laws after the 2020 complaint in its pursuit of a $2 billion disgorgement. However, the opening brief did not distinguish between XRP sales to US and non-US institutional investors.

Ripple must file its remedy-related opposition brief by April 22. Judge Torres could hand down a significantly less severe penalty if Ripple can demonstrate post-complaint compliance with US securities laws.

On Thursday, Ripple Chief Legal Officer Stuart Alderoty shared the news of an important ruling that could influence the Ripple case.

The US appellate courts dismissed an SEC attempt to overturn the Govil ruling. In the case SEC vs. Govil, the 2d Circuit held that the SEC may not ask for a crippling disgorgement award without proving that investors suffered actual financial harm.

Ripple could argue for a nonpunitive penalty if Ripple can demonstrate that US institutional investors did not suffer financial harm.

XRP eyes a third consecutive weekly loss.
XRP Weekly Chart 130424

Other News

Hong Kong Eyes BTC-Spot ETF Market Crown: On Thursday, news hit the wires of Hong Kong planning to approve a BTC-spot ETF. An Asian BTC-spot ETF market could be a boon for BTC and the broader crypto market.

Sam Bankman-Fried Appeals Conviction and the 25-year Sentence: On Thursday, Sam Bankman-Fried appealed the conviction on seven counts of fraud and the imposed 25-year jail term.

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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