XRP News: Ripple Files a New Motion in the Ongoing Legal Battle with the SEC

Key Insights:

• XRP gained 0.06% on Wednesday, ending the session at $0.5184.
• Ripple filed a Motion for a Sur-Reply on Wednesday as the legal battle with the SEC continues.
• On Thursday, SEC v Ripple and Coinbase case-related updates and US lawmaker scrutiny warrant investor attention.

The Wednesday Overview

On Wednesday, XRP gained 0.06%. Partially reversing a 1.63% loss from Tuesday, XRP ended the session at $0.5184. Significantly, XRP ended the day in positive territory for only the second time in eight sessions.

SEC v Ripple Case: Ripple Files Motion to File a Sur-Reply

Activity in the ongoing SEC v Ripple case drew investor interest overnight. On Wednesday, Ripple filed a motion to file a Sur-Reply relating to the SEC’s Motion to Compel.

The SEC filed a Motion to Compel on January 11, asking the court to order Ripple to provide,

• Post-complaint contracts governing XRP institutional sales.
• Financial statements for 2022-23.

Ripple opposed the Motion to Compel on January 19. The Sur-Reply is an additional response to the SEC’s Motion to Compel. Ripple will have further arguments to persuade the court to deny the SEC’s Motion to Compel.

If Judge Torres grants the motion for a Sur-Reply, investors must wait longer for the court ruling on the SEC’s Motion to Compel. Judge Torres could call for a court session to hear oral arguments about the motions before delivering a court ruling.

The Motion to Compel relates to Ripple breaching Section 5 of the 1933 Securities Act by selling unregistered securities to institutional investors. In July, Judge Analisa ruled that Ripple should have registered XRP as a security when selling to institutional investors.

The SEC v Ripple case is in its final stages. After completing remedies-related discovery, the SEC and Ripple must file remedy-related briefs. Ripple and the SEC must complete remedies-related discovery by February 12.

After remedies-related discovery, the parties will present arguments for and against a punitive penalty for breaking US securities laws. According to the Court Briefing Schedule,

• The SEC must file a remedy-related brief by March 13.
• Ripple must file a remedy-related brief reply by April 12.
• The SEC must file any reply to the Ripple brief by April 19.

After losing to Ripple in the Programmatic Sales ruling, the SEC will want Ripple to face a punitive penalty.

US Case Law and SEC Plans to Appeal Against the Programmatic Sales Ruling

The SEC may have requested the documents to ascertain if Ripple continued breaching Section 5 of the 1933 Securities Act after filing charges in December 2020. A continued breach of securities laws could sway Judge Torres to deliver a more punitive penalty.

However, US case law could limit the damages. In Morrison v NAB, the Supreme Court ruled the SEC only has jurisdiction over XRP sales to US institutional investors. Additionally, Ripple can deduct expenses related to XRP sales to US institutional investors from the proceeds from XRP sales to US institutional investors.

If the total proceeds from the sale of XRP to all institutional investors was $770 million, the penalty could be less than Ripple’s legal bill.

The immediate focus remains on the final stages of the SEC v Ripple case. However, SEC plans to appeal against the Programmatic Sales of XRP ruling remains a headwind. Notably, the SEC v Terraform Labs ruling impacted confidence in the court upholding the Programmatic Sales ruling.

In December, Judge Jed Rakoff ruled that TerraUSD and Luna are securities.

XRP Price Action

Daily Chart

XRP remained below the 50-day and 200-day EMAs, affirming bearish price signals. Significantly, the 50-day EMA narrowed further on the 200-day EMA, another bearish sign.

An XRP breakout from the $0.52 handle would give the bulls a run at the $0.5470 resistance level. A move through the $0.5470 resistance level would bring the 200-day EMA into play.

SEC v Ripple and Coinbase case-related updates and US lawmaker chatter warrant investor attention.

However, a fall through the $0.5042 support level would give the bears a run at the $0.4700 support level.

The 14-day RSI reading, 30.54, shows XRP on the border with oversold territory. Buying pressure may intensify at the $0.5042 support level.

4-Hourly Chart

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

An XRP return to the $0.52 handle would support a move to the 50-day EMA. A break above the 50-day EMA would bring the $0.5470 resistance level into play.

However, a drop below the $0.5042 support level would support a fall toward the $0.4700 support level.

The 4-hourly RSI, with a reading of 38.00, indicates an XRP break below the $0.5042 support level before entering oversold territory.