XRP News: SEC v Coinbase Case Took Center Stage on Wednedsay

Key Insights:

• XRP declined by 1.35% on Wednesday, ending the session at $0.5682.
• The SEC v Coinbase case took center stage on Wednesday.
• On Thursday, SEC v Ripple and Coinbase case-related chatter and SEC activity need consideration.

The Wednesday Overview

On Wednesday, XRP declined by 1.35%. Reversing a 0.10% gain from Tuesday, XRP ended the session at $0.5682.

SEC v Coinbase: Oral Arguments on Motion to Dismiss

On Wednesday, the SEC v Coinbase case took center stage. The SEC and Coinbase presented oral arguments on the Coinbase motion to dismiss (MTD). Coinbase filed the MTD in August, arguing the SEC lacks the statutory authority to regulate US crypto exchanges.

Coinbase Chief Legal Officer Paul Grewal shared his views on the hearing, saying,

“After hours and hours, this much remain clear: the SEC continues to claim broad authority over all investments while offering no limiting principle to its definition of investment contract.”

Grewal argued that Congress should dictate the SEC’s regulatory authority, not the SEC itself. The Coinbase CLO reiterated that Coinbase does not offer securities, calling on the court to provide the industry with much-needed clarity.

Coinbase CEO Brian Armstrong shared a live feed of the hearing.

The crypto community shared transcripts from the hearing. Amicus Curiae attorney John E. Deaton shared the post, which said,

“Favorite moment of argument so far:

SEC – the tokens themselves are not a security.

Judge Failla – that’s what the folks in the back table think (Coinbase). And they are wondering why they are here.”

Notably, Judge Failla asked the SEC if the issuers of the cryptos were also in breach of securities laws based on the SEC claim that Coinbase is selling securities. The SEC clarified the tokens, including solana (SOL), were securities at the time of issuance. The SEC presented 13 tokens in the claim.

During arguments, the SEC referred to Judge Rakoff’s ruling in the SEC v Terraform Labs case. Judge Failla affirmed the SEC disagreement with the Programmatic Sales ruling in the SEC v Ripple case. The SEC argued that there is no differentiation between tokens sold to institutional and retail investors.

The SEC discussed the ecosystem behind each token that leads to classifying such tokens as securities. Each token purchaser would be buying into the ecosystem with the expectation of profit.

The arguments contrast with the Coinbase argument that there is no contractual obligation between the token issuer and the buyer.

Judge Failla’s ruling on the Coinbase MTD could prove pivotal to the US crypto market. If Judge Failla grants the MTD, US lawmakers may force the SEC to cease regulating US crypto exchanges. Judge Failla could deliver her ruling in the next few weeks.

XRP Price Action

Daily Chart

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

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

SEC v Ripple and Coinbase case-related chatter and SEC activity need monitoring.

However, a drop below the $0.56 handle would bring the $0.5470 support level into play.

The 14-day RSI reading, 41.07, indicates an XRP break below the $0.5470 support level before entering oversold territory.

4-Hourly Chart

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

An XRP break above the 50-day EMA would support a run at the $0.5835 resistance level. A breakout from the $0.5835 resistance level would bring the 200-day EMA into play.

However, a fall through the $0.56 handle would give the bears a run at the $0.5470 support level.

The 4-hourly RSI, with a reading of 39.70, suggests an XRP fall to the $0.5470 support level before entering oversold territory.