XRP News: Crypto Legal Expert React Further to SEC v Coinbase Hearing

Key Insights:

• XRP gained 1.65% on Saturday, ending the session at $0.5533.
• The crypto community continued to react to the SEC arguments from the SEC vs Coinbase court hearing.
• On Sunday, SEC activity, US lawmaker scrutiny, and SEC v crypto case-related news need monitoring. 

The Saturday Overview

On Saturday, XRP gained 1.65%. Reversing a 1.34% loss from Friday, XRP ended the session at $0.5533. Significantly, XRP ended a three-day losing streak.

SEC v Ripple: The Latest Updates and SEC Tactics

There were no SEC v Ripple case-related updates to influence buyer appetite for XRP on Saturday. On Friday, Ripple opposed the SEC Motion to Compel, leaving Judge Analisa Torres to decide whether Ripple must provide more documents.

The SEC filed a letter Motion to Compel, requesting the Court to force Ripple to disclose,

• 2022-2023 financial statements.
• Post-complaint contracts governing XRP institutional sales.
• Respond to questions relating to post-complaint XRP institutional sales proceeds.

Ripple and the crypto community must await the court ruling on the SEC Motion to Compel. If Judge Torres dismisses the Motion to Compel, investors may consider this favorable. Judge Torres will decide the penalty Ripple must pay for breaching securities laws.

In July, Judge Torres ruled that Ripple should have registered XRP sales to sophisticated investors and entities under Section 5 of the 1933 Securities Att.

The Motion to Compel suggests the SEC wants to ascertain whether Ripple continued breaching Section 5 of the 1933 Securities Act after the complaint. In opposition to the Motion to Compel, Ripple argued,

“The SEC never argued that post-complaint conduct was relevant to remedies but instead took the position that post-complaint conduct was entirely irrelevant to the case […]. The SEC should not be permitted to reverse course now.”

Despite the investor interest in the SEC v Ripple, the crypto market continued reacting to the SEC v Coinbase court hearing from January 17.

Crypto Community Uproar Over the SEC v Coinbase Hearing

On Wednesday, January 17, the SEC and Coinbase presented oral arguments relating to the Coinbase motion to dismiss (MTD). Coinbase filed the MTD in August, arguing the SEC lacks the statutory authority to regulate crypto exchanges.

During the hearing, the SEC stated the 13 cryptos cited in the case were all securities on issuance. The SEC stated crypto investors buy into the ecosystem associated with each token with the expectation of profit.

Ripple Chief Legal Officer Stuart Alderoty shared a transcript from the hearing, saying,

“If the SEC, during the Howey oral argument, had told the Sup. Ct. that folks were investing in an “ecosystem of oranges” they would have been summarily thrown out of the courtroom. The SEC has strayed so far from the law it would be laughable if it weren’t so sad and damaging.”

Amicus Curiae attorney John E. Deaton responded to references to SEC lawyer comments about BTC, saying,

“It was, to me, the most ridiculous thing SEC lawyers uttered at the hearing. But, then again, if there’s one thing I’ve learned about SEC lawyers, it’s that they absolutely refuse to let the truth get in their way.”

During the hearing, the SEC lawyers declared BTC is not a security. The SEC justified the classification by saying there is no ecosystem behind it.

Coinbase Chief Legal Officer Paul Grewal Joins the Community Chatter

Coinbase Chief Legal Officer Paul Grewal shared a Pokeman analogy, saying,

“To say Pokémon cards do not provide access to an ecosystem is to say you never played Pokémon. This argument to avoid sweeping them in as securities but still tag tokens is, well, absurd. Do I need to retain this author as an expert witness under Fed. R. Evid. 701?”

Grewal, responding to the comments from Stuart Alderoty, also warned Taylor Swift fans about buying tickets and t-shirts, saying,

“A thousand times yes. If tokens’ access to “ecosystems” without any access to enterprise income, profits, or assets makes them securities, somebody better warn Taylor Swift fans before they buy that ticket or t-shirt.”

The ruling on the Coinbase motion to dismiss could be pivotal for the US digital asset space. If Judge Failla grants the motion to dismiss, the SEC will lose its free reign over the US crypto exchanges. A ruling in favor of Coinbase could end regulation by enforcement.

XRP Price Action

Daily Chart

XRP remained below the 50-day and 200-day EMAs, affirming bearish price signals.

An XRP break above the 200-day EMA would support a move to the $0.5835 resistance level and 50-day EMA.

SEC activity, US lawmaker scrutiny, and SEC v crypto case-related news need consideration.

However, a break below the $0.5470 support level would bring the $0.5042 support level into play.

The 14-day RSI reading, 40.05, suggests an XRP fall through the $0.52 handle before entering oversold territory.

4-Hourly Chart

On the 4-hourly, XRP sat below the 50-day and 200-day EMAs, affirming bearish price signals.

An XRP break above the 50-day EMA would support a move to the $0.5835 resistance level and 200-day EMA.

However, a fall through the $0.5470 support level would give the bears a run at the $0.5042 support level.

The 4-hourly RSI, with a reading of 47.19, indicates an XRP drop below the $0.52 handle before entering oversold territory.