XRP News: SEC v Ripple Case Heats Up with Opposition Filing

Key Insights:

• XRP declined by 1.34% on Friday, ending the session at $0.5443.
• SEC v Ripple case-related news impacted.
• On Saturday, SEC v Ripple-related news and SEC activity need monitoring. 

The Friday Overview

On Friday, XRP declined by 1.34%. Following a 2.90% slide on Thursday, XRP ended the session at $0.5443. Significantly, XRP extended the losing streak to three sessions.

SEC v Ripple: Activity Picks Up as February 12 Deadline Nears

Activity in the ongoing SEC v Ripple case drew investor interest on Friday. Ripple opposed the SEC Motion to Compel. On January 11, the SEC requested the Court order Ripple to provide 2022-2023 financial statements, post-complaint contracts governing XRP institutional sales, and respond to questions relating to post-complaint XRP institutional sales proceeds.

Ripple and the SEC are progressing through remedies-related discovery. The remaining charges relate to XRP sales to US institutional investors. On July 13, 2023, Judge Torres ruled,

“Institutional Sales of XRP [before December 22, 2020] to sophisticated individuals and entities … pursuant to written contracts should have been registered under Section 5 of the Securities Act of 1933.”

Judge Torres also ruled that XRP was not a security in Programmatic Sales.

The Ripple Opposition to SEC Motion to Dismiss

Defense attorney James Filan shared the court filing. Ripple cited two reasons for opposing the Motion to Compel.

Ripple argued the SEC had sufficient time to request post-complaint documents during fact discovery. Fact discovery ended on August 31, 2021. Significantly, 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.”

The reason for requesting post-complaint documents relates to the court decision on the penalty for XRP sales to institutional investors. The SEC may attempt to show Ripple continued to breach securities laws after filing the charges against Ripple. If Ripple continued to breach securities laws after the July 13 court ruling, Judge Analisa Torres could rule on a more punitive penalty.

Judge Torres could link the penalty to proceeds from XRP sales to US institutional investors net of expenses.

In the opposition filing, Ripple also argued,

“The SEC has failed to justify each of its requests on the merits. They are irrelevant: the information the SEC seeks has no bearing on the Court’s remedies determination. The SEC apparently wishes to have the Court substitute a summary determination as to whether Ripple’s post-complaint sales constitute investment contracts in place of a full proceeding on the merits to resolve that question.”

Ripple and the SEC must complete remedies-related discovery by February 12, 2024.

The outcome of the SEC v Ripple case and other SEC court-related activity could materially influence buyer appetite for XRP in 2024.

XRP Price Action

Daily Chart

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

An XRP break above the $0.5470 resistance level would support a move to the 200-day EMA. A breakout from the 200-day EMA would give the bulls a run at the $0.5835 resistance level.

SEC v crypto case-related news and SEC activity remain focal points for investors.

However, a drop below the $0.5350 handle would support a fall to the $0.5042 support level.

The 14-day RSI reading, 35.17, indicates an XRP break below the $0.5350 handle before entering oversold territory.

4-Hourly Chart

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

An XRP breakout from the $0.5470 resistance level would bring the 50-day EMA into play. A break above the 50-day EMA would support a move toward the $0.5835 resistance level.

However, a break below the $0.5350 handle would bring the $0.5042 support level into play.

The 4-hourly RSI, with a reading of 34.41, suggests an XRP fall through the $0.5350 handle before entering oversold territory.