XRP News: SEC v Ripple, Brad Garlinghouse, SEC v Coinbase and Gary Gensler

Key Insights:

• XRP slid by 2.90% on Thursday, ending the session at $0.5517.
• SEC v Ripple case-related updates and Ripple CEO Brad Garlinghouse garnered investor interest.
• On Friday, investors must consider SEC activities and updates related to the SEC v crypto cases. 

The Thursday Overview

On Thursday, XRP slid by 2.90%. Following a 1.35% loss from Wednesday, XRP ended the session at $0.5517.

Ripple CEO Brad Garlinghouse Targets SEC Chair Gary Gensler

On Thursday, Ripple CEO Brad Garlinghouse shared an interview from Davos, saying,

“In the US, crypto is spending more time in the judicial process to get clarity while the other biggest financial centers in the world are actively codifying rules. Most players in this industry WANT to follow the rules, but you’ll never hear Chair Gensler acknowledge that.”

During an interview with Fox Business, Garlinghouse discussed the US regulatory landscape, saying,

“Gary Gensler has prioritized hiring more lawyers to litigate the industry. This is often described as regulation through enforcement. If we just took the time to cuttify rules of the road, most of the industry in crypto wants to follow the rules of the road.”

Garlinghouse also suggested using ChatGPT to lay out a regulatory framework for the US crypto market, saying,

“That’s more than the SEC has done, and it’s frustrating.”

Referring to the SEC v Coinbase hearing on Wednesday, Garlinghouse said,

“The judicial system continues to slap down the SEC because they’re overreaching, they’re overstepping what the laws say. That’s a reason why they lost the case against Ripple. It’s the reason why they lost the case against Grayscale. It’s the reason why they were dragged kicking and screaming to have an ETF. Thus, you know, as I was quoted, I think Gary Gensler hasn’t been acting. He’s been acting on his own agenda, not the people’s agenda in the United States.”

SEC v Ripple: Updates on the Horizon

There were no SEC v Ripple case-related updates to influence buyer appetite for XRP on Thursday. However, as the case nears a conclusion, we can expect increased activity in the ongoing case.

On Friday, Ripple must provide the SEC with 2022-23 financial statements and post-complaint contracts governing XRP institutional sales. The SEC filed a Motion to Compel on January 11. The Motion to Compel asked the court to order Ripple to submit the documents under discovery.

Ripple or the SEC are unlikely to make the documents public. However, more Motions to Compel are possible before the February 12 deadline for remedies-related discovery. Upon conclusion of the discovery process, the SEC must file its remedy-related brief by March 13.

The SEC will argue for a punitive disgorgement to deter other crypto firms from breaching securities laws.

Ripple must submit its remedy-related brief by April 12. Case law continues to favor Ripple. In Morrison v NAB, the Supreme Court ruled the SEC only has jurisdiction over US-based sales. Ripple may also deduct expenses from the proceeds of XRP sales to US institutional investors to reach the starting point for penalty arguments.

By April 19, the SEC must file any reply brief in response to Ripple’s remedy-related brief. The SEC will attempt to counter Ripple’s arguments. The Motion to Compel highlights the SEC’s intentions.

The SEC may need the post-complaint documents to establish whether Ripple continued to breach securities laws after the SEC filed charges in December 2020. A continued breach could tilt the scales toward the SEC.

The outcome of the SEC v Ripple case is significant. However, the Programmatic Sales of XRP ruling could have more impact if the courts uphold the ruling on appeal.

SEC v Coinbase: A Glimpse into SEC Plans to Appeal

On Wednesday January 17, the SEC and Coinbase (COIN) presented oral arguments relating to the Coinbase Motion to Dismiss (MTD). SEC lawyers argued that there is no difference between tokens sold to retail and institutional investors.

Notably, the SEC argued that the ecosystem behind tokens qualify the classification of tokens as securities. Each token purchaser, institutional or retail, would be buying into the ecosystem with the expectation of profit.

The SEC also took the opportunity to reference Judge Rakoff’s ruling in the SEC v Terraform Labs case. Judge Failla also acknowledged that the SEC disagreed with the Programmatic Sales ruling.

The SEC v Coinbase case could become a legal blueprint for the US crypto market. A Coinbase victory could pour cold water on SEC plans to appeal the XRP ruling and dilute SEC powers to regulate the US digital asset space.

XRP Price Action

Daily Chart

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

An XRP breakout from the 200-day EMA would bring the $0.5835 resistance level and the 50-day EMA into play.

SEC case-related news and activity are focal points for investors on Friday.

However, a break below the $0.5470 support level would support a fall toward the $0.5042 support level.

The 14-day RSI reading, 37.09, suggests an XRP fall through the $0.54 handle before entering oversold territory.

4-Hourly Chart

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

An XRP return to the $0.56 handle would support a move to the 50-day EMA and the $0.5835 resistance level.

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 32.63, indicates an XRP break below the $0.5470 support level before entering oversold territory.