XRP News: Crypto Legal Fraternity React Further to the Terraform Labs Ruling

Key Insights:

• XRP fell by 0.32% on Saturday, ending the session at $0.6210.
• Terraform Labs/Do Kwon ruling resonated on Saturday.
• SEC v crypto case-related chatter and US lawmaker scrutiny remain focal points.

The Saturday Overview

On Saturday, XRP fell by 0.32%. Following a 1.92% loss on Friday, XRP ended the day at $0.6210.

Terraform Labs Ruling Resonated

On Saturday, the crypto community continued to react to the SEC v Terraform Labs/Do Kwon ruling. Judge Rakoff ruled that Luna and TerraUSD are securities. The SEC v Terraform Labs/Do Kwon case will begin on January 29, 2024.

Ripple Chief Legal Officer Stuart Alderoty responded further to the ruling, saying,

“I laugh when I see a crypto critic call the Terra ruling “mammoth” and then say Ripple’s victory is “minuscule.” Ripple’s win was a broadside, but even a small crack in a battleship compromises its structural integrity and will eventually sink it.”

Alderoty was likely reacting to a John Reed Stark post on X (formerly Twitter). The former SEC Chief of Internet Enforcement had this to say,

“To me, the XRP victory was not mammoth, it was minuscule — and, in the Judge’s own words lacks precedential value.”

Stark also gave his view on the SEC appealing against the Programmatic Sales of XRP ruling, adding,

“Moreover, my take is that the XRP decision will be overturned on appeal.”

Amicus Curia attorney John E. Deaton posted a response to the Alderoty comments, saying,

“A Howey analysis is a fact intensive exercise. From the moment Judge Rakoff denied Terra’s Motion to Dismiss, I’ve said comparing the two crypto cases is like comparing two auto accident cases, with completely different facts.”

Deaton continued by differentiating the Terraform Labs and Ripple cases, using auto accidents as analogies.

There were no SEC v Ripple case-related updates to influence the buyer appetite for XRP. However, the lingering threat of the SEC appealing the Programmatic Sales ruling remained a headwind.

Terraform Labs Ruling Raises Expectations of an SEC Appeal

The Terraform Labs/Do Kwon ruling likely cements expectations of the SEC appealing against the Programmatic Sales ruling.

However, the SEC must wait until the end of the SEC v Ripple case before filing an appeal. Legal experts expect an appeal to extend into 2025.

The SEC and Ripple are currently progressing through remedies-related discovery. After the final remedy-related filing on April 19, 2024, Judge Torres will decide the penalty Ripple must pay for XRP sales to US institutional investors.

XRP Price Action

Daily Chart

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

An XRP break above the $0.6354 resistance level would support a move to the $0.65 handle.

US lawmaker scrutiny, SEC activity, and SEC case-related chatter remain the focal points.

However, a fall through the 50-day EMA would give the bears a run at the $0.5835 support level.

The 14-day RSI reading, 48.82, suggests an XRP fall to the $0.5835 support level before entering oversold territory.

4-Hourly Chart

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

An XRP move through the EMAs would support a break above the $0.6354 resistance level to target the $0.65 handle.

However, a drop below the $0.60 handle would bring the $0.5835 support level into play.

The 4-hourly RSI, with a reading of 46.48, suggests an XRP drop to the $0.5835 support level before entering oversold territory.