XRP News: Court Rulings, Case Law, and SEC Plans to Appeal

Key Insights:

• XRP fell by 1.26% on Sunday, ending the session at $0.5241.
• SEC v crypto cases continued to influence investor sentiment.
• On Monday, court rulings from the ongoing SEC v Ripple case need consideration.

The Sunday Overview

On Sunday, XRP fell by 1.26%. After a 0.19% loss on Saturday, XRP ended the session at $0.5241.

SEC v Ripple: Case Law Favors Ripple

There were no SEC v Ripple case-related updates on Sunday. However, the SEC and Ripple are progressing through remedies-related discovery. Following this phase, the SEC will submit a remedy-related brief on March 13, advocating for a punitive penalty. Ripple’s deadline for filing its remedy-related brief is April 12, and the SEC must respond by April 19.

Judge Analisa Torres could rule on the SEC Motion to Compel this week. Ripple opposed the motion to obtain 2022/23 financial statements and post-complaint contracts governing XRP sales to institutional investors.

The SEC will likely want to ascertain if Ripple continued breaking Section 5 of the 1933 Securities Act after the July 13, 2023, court ruling. Judge Torres ruled that Ripple broke Section 5 of the 1933 Securities Act for failing to register XRP as a security when sold to institutional investors.

If Judge Torres denies the Motion to Compel, the SEC may return its attention to pre-complaint facts. However, case law favors a less punitive penalty for breaking securities laws.

The SEC will push for a punitive penalty, but Ripple could cite three cases to argue against a punitive disgorgement.

In Morrison v NAB, the US Supreme Court ruled the SEC only has jurisdiction over US-based sales. Pre-complaint proceeds from XRP sales to institutional investors totaled $770 million. However, Ripple will show total sales to US institutional investors that could significantly lower the target number.

In Liu v SEC, the court ruled a disgorgement award cannot exceed the net profits of the wrongdoer. The court ruling allows Ripple to show expenses relating to XRP sales to US institutional investors and net profit.

The court would consider a penalty based on the net profit of XRP sales to US institutional investors.

Finally, in SEC v Govil, the court ruled that the SEC cannot ask for a punitive disgorgement without demonstrating investors suffered financial losses. Ripple could demonstrate the value of XRP at the time of each sale to a US institutional investor and whether any investors suffered financial loss.

Although case law may favor Ripple, the SEC’s intention to appeal the Programmatic Sales ruling is an XRP headwind. In July 2023, Judge Torres ruled that programmatic sales of XRP failed to meet the third prong of the Howey Test.

XRP Price Action

Daily Chart

XRP sat below the 50-day and 200-day EMAs, sending bearish price signals.

An XRP break above the $0.5470 resistance level would support a move to the 200-day and 50-day EMAs.

SEC v Ripple case-related updates need consideration.

However, a drop below the $0.5042 support level would give the bears a run at the $0.4700 support level.

The 14-day RSI reading, 36.15, suggests an XRP break below the $0.5042 support level before entering oversold territory.

4-Hourly Chart

On the 4-hourly, XRP remained below the 50-day and 200-day EMAs. The EMAs reaffirmed the bearish price signals.

If XRP breaks above the 50-day EMA, it could test the $0.5470 resistance level. Conversely, a drop below the $0.52 mark might lead to bears targeting the $0.5042 support level.

The 4-hourly RSI, with a reading of 45.23, indicates an XRP fall to the $0.5042 support level before entering oversold territory.