XRP News Today: Judge Torres’ Ruling Anniversary Sparks Settlement Hopes

On July 13, 2023, Judge Analisa Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test. Furthermore, Judge Torres ruled that Ripple violated US securities laws by selling unregistered XRP to institutional investors. One year later, investors expect a remedies-related verdict.

SEC vs. Ripple: Is the SEC Planning to Settle?

On Friday, July 12, XRP surged by 5.63%. Following a 2.05% rally on Thursday, July 11, XRP closed at $0.4745. XRP outperformed the broader crypto market, which rose by 1.22% to a market cap of $2.098 trillion.

Speculation about a settlement in the SEC vs. Ripple case intensified on Friday. Pro-XRP investor JackTheRipple shared news about an SEC meeting. The SEC scheduled a closed meeting at their Washington DC Headquarters for July 18. Agenda items include settlements, resolutions to litigation claims, and enforcement proceedings.

Judge Torres could deliver the Ripple case verdict at any time, possibly creating anxiety for the SEC.

Post-Complaint Conduct and Penalties

In March 2024, the SEC filed its remedies-related opening brief. The SEC pushed for a $2 billion penalty. Furthermore, the SEC also argued for an injunction prohibiting XRP sales to institutional investors.

Ripple countered in its remedies-related opposition brief, presenting its case for a $10 million penalty. Significantly, Ripple argued it did not breach US securities laws after the December 2020 complaint (post-complaint).

Ripple stated that post-complaint XRP sales were to accredited investors and also via On-Demand Liquidity (ODL) contracts. They explained that ODL contracts prevent profits or losses.

Why are the terms of ODL contracts significant?

The terms of ODL contracts are significant to US securities laws. One component of the Howey Test is the expectation of profit. If ODL contracts prevent profits, the SEC cannot argue that institutional investors bought XRP with the expectation of profit. Sales to accredited investors are exempt under US securities laws.

The SEC opposed Ripple’s push for a $10 million penalty in its remedies-related reply brief. However, the SEC claimed that the penalty floor would be $102.6 million, if based on previous penalty calculations.

A $10 million penalty may be realistic if Judge Torres views post-complaint XRP transactions as compliant with US securities laws. In a previous Ripple case ruling, Judge Sarah Netburn stated that the courts may,

“Consider post-complaint conduct when determining whether an injunction is necessary and just.”

Could the SEC Offer a $102.6 Million Settlement?

The SEC would prefer a $102.6 million over $10 million. Ripple may want to avoid the risk of an injunction prohibiting XRP sales to institutional investors. Given the risks, a settlement is a possibility.

Importantly, the SEC cannot appeal the Programmatic Sales of XRP ruling if Ripple agrees to a settlement. A settlement would end the SEC’s plans to appeal and could boost demand for XRP.

Could XRP retake the $1 handle?

On July 13, 2023, XRP surged to $0.9327 as investors reacted to the court rulings. However, XRP slid back below $0.60. The threat of an SEC appeal fueled the reversal.

Investors should remain alert, with a settlement or a court verdict pending on the horizon. Stay updated with our latest views and analysis to manage exposures to XRP and the broader crypto market.

XRP Price Action

Daily Chart

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

An XRP break above the 50-day EMA and top trend line could signal a move to the 200-day EMA. A breakout from the 200-day EMA would give the bulls a run at the $0.5739 resistance level.

SEC activity and SEC vs. Ripple case-related news require consideration.

Conversely, an XRP drop below the bottom trend line could signal a fall to the $0.45 handle.

With a 14-day RSI reading of 56.34, XRP could rise to the 200-day EMA before entering overbought territory.