XRP News Today: Uncertainty Looms as SEC’s Ripple Lawsuit Continues

The Sunday Overview

On Sunday (May 12), XRP declined by 1.36%. Reversing a 0.92% gain from Saturday (May 11), XRP ended the week down 5.88% to $0.4993.

SEC vs. Ripple: Uncertainty Grips XRP

There were no SEC vs. Ripple case-related updates on Sunday for investors to consider. The lack of case-related news left XRP on the back foot, with investors facing a likely summer of uncertainty.

After the remedy-related brief filings between March and May, the court must rule on the penalty Ripple must pay for breaching US securities laws. In July 2023, Judge Analisa Torres ruled that Ripple breached US securities laws for failing to register XRP as a security in sales to institutional investors.

In the remedy-related opening brief, the SEC pursued an almost $2 billion penalty and an injunction, prohibiting Ripple from selling XRP to institutional investors. The SEC did not focus on XRP sales to US institutional investors, a consideration for the courts in determining the penalty. In Morrison vs. NAB, the US Supreme Court ruled the SEC only has jurisdiction over US-based sales.

The court must also decide whether Ripple breached US securities laws after the December 2020 complaint. In its opposition brief, Ripple argued sales were to accredited investors or via ODL contracts. ODL contracts prevent investors from facing profits or losses. Institutional investors cannot expect profits if signed agreements prevent profits.

In its reply brief, the SEC countered the Ripple argument about ODL agreements. The SEC argued that institutional sales via ODL agreements breached US securities laws and violated US securities laws after the complaint.

Additionally, the SEC highlighted Ripple’s plan to launch a stablecoin. The SEC argued that a Ripple stablecoin would be an unregistered security.

The courts begin deliberations, after several procedural steps. The timing of a court ruling could be significant for the US crypto market. The SEC may appeal the Programmatic Sales of XRP ruling at the end of the Ripple case.

SEC Appeal Plans Hinged on Several External Forces

Several events may impact SEC plans to appeal against the Programmatic Sales of XRP ruling. These include.

• Investors await a court ruling on the Coinbase (COIN) motion for interlocutory appeal. Coinbase filed the motion for interlocutory appeal to contest the court rejection, in large part, the motion to dismiss SEC claims that Coinbase operates as an unregistered securities exchange, broker, and clearing agency. A Coinbase victory could force the SEC to end immediate plans to appeal the XRP ruling.
• Office of Inspector General (IG) investigation into crypto conflicts of interest within the SEC needs monitoring. The SEC may hit the brakes on appealing the Programmatic Sales of XRP ruling If the IG identifies crypto conflicts of interest within the SEC.
• Finally, the US Presidential Election may become relevant. Former President and Republican front-runner Donald Trump recently plugged cryptos. Investors view a Republican Party victory as the end of the road for SEC Chair Gensler, a boon for the US digital asset space. The SEC may end its plans to appeal if the Republican Party wins the US Presidential Election.

As the SEC vs. Ripple case nears its conclusion, XRP remains in the hands of the SEC and US courts. SEC cases against Coinbase, Kraken, and Robinhood Markets Inc. (HOOD) will further influence SEC powers to tag cryptos securities.

XRP Price Action

Daily Chart

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

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

Investors should monitor SEC vs. crypto case-related updates and SEC activity.

Conversely, an XRP break below the $0.4950 handle could bring sub-$0.48 levels into play.

The 14-day RSI reading, 40.96, indicates an XRP drop below the $0.48 handle before entering oversold territory.

4-Hourly Chart

On the 4-hourly, XRP sat below the 50-day and 200-day EMAs. The EMAs confirmed the bearish price trends.

A break above the trend lines and the 50-day EMA would support a move toward the 200-day EMA and the $0.5361 resistance level.

However, an XRP fall through the $0.4950 handle could signal an XRP drop below the $0.48 handle.

The 14-day RSI reading, 38.65, suggests an XRP fall to the $0.48 handle before entering oversold territory.