XRP News Today: SEC vs. Ripple Case Update Triggers Market Uncertainty

The Tuesday Overview

On Tuesday (May 7), XRP slid by 2.83%. Reversing a 1.85% gain from Monday (May 6), XRP ended the session at $0.5250.

SEC vs. Ripple: SEC Files Redacted Version of Remedies Reply Brief

The SEC vs. Ripple case was in the spotlight on Tuesday (May 7). New court filings attracted investor attention, with the SEC filing the redacted version of its remedies reply brief.

Defense attorney James Filan shared the redacted reply brief. The SEC argued that Ripple’s primary business is unregistered XRP sales, which raises the likelihood of further violations of U.S. securities laws. Significantly, the SEC referred to Ripple’s plans to launch a stablecoin, labeling it as the issuance of a new unregistered crypto asset.

Countering Ripple’s argument that post-complaint XRP sales were to accredited investors and via ODL sales, the SEC said,

“And the Court already found that Ripple’s ODL Institutional Sales up to 2020 violate the law.”

Ripple Chief Legal Officer Stuart Alderoty reacted to the SEC filing, saying,

“More of the same from the SEC — failing to faithfully apply the law and trying to pull the wool over the Judge’s eyes. The good news is that we are closer than ever to putting this lawsuit behind us, though unfortunately, many are just starting the journey. We trust the Court will approach the remedies phase fairly.”

Alderoty continued,

“And just when you think the SEC can’t sink any lower, if you are a financial regulator outside the U.S. and have done the hard work of establishing comprehensive crypto licensing frameworks, know that the SEC has no respect for you and thinks you are handing out the equivalent of fishing licenses.”

Ripple’s Chief Legal Officer referred to an SEC argument against Ripple’s assurances it would not violate U.S. securities laws in the future, which stated,

“Ripple also assures the Court it need not be worried about whether Ripple could again violate the U.S. securities laws by pointing to different licenses it has obtained from different jurisdictions, including those Ripple explains do not treat XRP sales as sales of securities. […]. This argument – akin to saying a New York restaurant need not obtain a liquor license because it obtained a fishing license in California – is absurd.”

The SEC’s arguments introduce uncertainty about the case’s outcome for XRP, especially concerning post-complaint activity and the injunction request. A court injunction prohibiting XRP sales to institutional investors would impact expansion plans for the U.S. and XRP.

XRP Price Action

Daily Chart

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

An XRP move through the 50-day EMA could give the bulls a run at the 200-day EMA and the $0.5739 resistance level. A break above the $0.5739 resistance level would support a move to the $0.60 handle.

SEC vs. Ripple case-related chatter needs investor consideration following the latest filing.

Conversely, an XRP drop below the top and bottom trend lines could bring sub-$0.50 levels into play.

The 14-day RSI reading, 45.80, suggests an XRP drop below the $0.50 handle before entering oversold territory.

4-Hourly Chart

On the 4-hourly, XRP hovered below the 50-day and 200-day EMAs. The EMAs affirmed the bearish price signals.

An XRP break above the 50-day EMA would support a move toward the $0.5361 resistance level. A breakout from the $0.5361 resistance level would bring the 200-day EMA into play.

However, an XRP drop below the trend lines could signal a fall to the $0.50 handle.

The 14-day RSI reading, 43.10, indicates an XRP drop to the $0.50 handle before entering oversold territory.