- XRP price dropped below $0.55 on Thursday as both Ripple and SEC work on remedy-related briefs.
- March 13 is the next key deadline for the SEC v. Ripple lawsuit.
- The court will determine penalties for Ripple’s institutional sales of XRP by the April 29 deadline.
The Securities and Exchange Commission (SEC) has been criticized for its lawsuit against Ripple and a crypto exchange LEJILEX along with the Crypto Freedom Alliance of Texas (CFAT) filed a lawsuit against the regulator, seeking a declaration that “secondary-market sales of digital assets like the ones that LEJILEX intends to facilitate through its exchange are not sales of securities.”
XRP price dropped below $0.55 on Thursday.
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Daily Digest Market Movers: SEC v. Ripple lawsuit moves beyond remedies-related discovery
- SEC v. Ripple lawsuit has moved past the discovery stage on the February 20 deadline. The two parties are working on their remedies-related briefs.
- The three key deadlines in the legal battle between the two firms are:
- March 13: When SEC files remedies-related brief
- April 12: Deadline for motions opposing remedies proposals
- April 29: Final remedies deadline
- On April 29, the court will determine the penalty for Ripple’s institutional sales and the case will likely draw to a close, unless there is a trial.
- The LEJILEX crypto exchange and the Crypto Freedom Alliance of Texas (CFAT) sued the SEC on Wednesday, seeking a declaration that “secondary-market sales of digital assets like the ones that LEJILEX intends to facilitate through the http://Legit.Exchange are not sales of securities.
- The exchange is seeking the declaration under the Declaratory Judgment Act, asking the court to order that secondary market sales of digital assets are not sales of securities, declaring that the does not need to register with the SEC as an exchange, broker, or clearing.
- The lawsuit marks the first time a crypto exchange has sued a regulator before the launch of a project, asking the court to adjudicate questions related to digital asset securities.
- The regulator has sixty days to respond to the lawsuit.
Technical Analysis: XRP price suffers a correction, further decline likely
XRP price is currently in an uptrend. The altcoin slipped below the psychologically important $0.55 level on Thursday and a sweep of the 23.6% Fibonacci retracement level is likely at $0.5219.
XRP price could resume its rally towards the 78.6% Fibonacci retracement of its drop from the 2024 peak, at $0.6073, once its bounces off support at $0.5219. The Moving Average Convergence/ Divergence (MACD) indicator shows green bars that imply there is positive momentum. The Awesome Oscillator (AO) reveals that the asset’s price trend could reverse, the red bars signal a likely shift in the direction of XRP price.
XRP/USDT 1-day chart
A daily candlestick close below the 23.6% Fibonacci retracement, at $0.5219 could signal that XRP price is likely to correct further. A sweep of $0.50 is likely and XRP price could recoup its losses, once it closes above this level.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14:
For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and will need to keep litigating over the around $729 million it received under written contracts.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.
Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.
Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.
While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
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