XRP News: SEC v Ripple Filings and SEC v Coinbase Rulings

Key Insights:

• XRP declined by 0.18% on Tuesday, ending the session at $0.5051.
• A court ruling in the ongoing SEC v Ripple case left XRP in negative territory, bucking the broader market trend.
• On Wednesday, the SEC v Ripple case warrants investor attention.

The Tuesday Overview

On Tuesday, XRP declined by 0.18%. Partially reversing a 0.62% gain from Monday, XRP ended the Monday session at $0.5051.

SEC v Ripple: Ripple Files for an Extension to Remedies-Related Discovery

On Monday, Judge Sarah Netburn granted the SEC Motion to Compel. Significantly, Judge Netburn granted the Motion to Compel without exception.

Ripple must provide the SEC with 2022/2023 financial statements and post-complaint contracts governing XRP sales to institutional investors. Moreover, Ripple must respond to questions regarding proceeds from XRP institutional sales after the SEC filed the complaint.

XRP responded to the court motion, requesting a one-week extension to the remedies-related discovery deadline. Ripple requested an extension from February 12 to February 20.

Ripple referenced the dispute over the relevance of the post-complaint discovery. The court ruling came one week before the February 12 deadline. Ripple stated the extension would allow sufficient time to collect and produce the Motion to Compel documents.

The filing for an extension will unlikely have a bearing on the ongoing SEC v Ripple case. Ripple and the SEC are progressing through remedies-related discovery regarding XRP sales to US institutional investors.

In July 2023, Judge Analisa Torres ruled Ripple breached Section 5 of the Securities Act. The SEC is pursuing a punitive disgorgement. Post-complain breaches of Section 5 could give the SEC a stronger position to demand a punitive penalty.

In the Monday ruling, Judge Netburn stated,

“The SEC credibly argues that the District Judge may consider post-complaint conduct when determining whether an injunction is necessary and just.”

Notably, the documents could determine the size of the penalty for breaching Section 5 of the Securities Act.

The SEC v Ripple case will likely remain a focal point throughout the year.

SEC Plans to Appeal the Programmatic Sales Ruling

The markets accept that Ripple must pay a disgorgement for breaching US Securities Laws. However, uncertainty about SEC plans to appeal against the Programmatic Sales of XRP ruling remains an XRP headwind.

In October, Judge Torres rejected the SEC interlocutory appeal. The ruling forced the SEC to expedite the SEC v Ripple case to appeal against the Programmatic Sales ruling at the end of the case.

Since the rejection, Judge Rakoff ruled TerraUSD and Luna are securities in the SEC v Terraform Lab case. The ruling created more confusion about crypto asset classifications as commodities or securities.

Significantly, the ruling could give the SEC more basis to appeal against the Programmatic Sales ruling.

However, the ongoing SEC v Coinbase (COIN) case could adversely impact SEC plans to appeal against the Programmatic Sales ruling. The crypto community awaits a court ruling on the Coinbase Motion to Dismiss (MTD).

If Judge Katherine Failla grants the Coinbase MTD, the SEC may lose its free reign over crypto assets. Significantly, the SEC may also end plans to appeal the Programmatic Sales ruling. Such an outcome would be a boon for XRP and the broader crypto market.

As background, Coinbase filed an MTD, arguing the SEC lacks the statutory authority to regulate crypto exchanges.

XRP Price Action

Daily Chart

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

A breakout from the $0.52 handle would give the bulls a run at the $0.5470 resistance level. An XRP break above the $0.5470 resistance level would bring the 50-day and 200-day EMAs into play.

Investors must consider SEC v Ripple case-related news, SEC activity, and US regulatory scrutiny.

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, 37.27, indicates an XRP drop below the $0.49 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 50-day EMA would bring the 200-day EMA and the $0.5470 resistance level into play.

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

The 4-hourly RSI, with a reading of 46.65, indicates an XRP drop to the $0.4700 support level before entering the oversold territory.