Ripple (XRP) executive Brad Garlinghouse is making headlines for his statement on Securities and Exchange Commission (SEC) Gary GenslerÂ’s remarks on crypto. Gensler said crypto is a field where either the executives are in jail or awaiting extradition.Â
Garlinghouse slammed the SEC ChairÂ’s statement in a recent tweet on X. The Ripple CEO has faced a lawsuit in California that is set to go to trial for his “misleading statements” in an interview in 2017.Â
XRP is struggling under $0.48, the altcoin is trading at $0.4723, down 0.69% on Wednesday.Â
Absolute nonsense coming from @GaryGensler today.
And this slander about “all crypto execs going to jail” from the man who completely missed FTX (and actually cozied up to SBF), and wasn’t even invited to the DOJ announcement about Binance.
If he was really “working for the… https://t.co/c3ynB5Gncl
— Brad Garlinghouse (@bgarlinghouse) June 25, 2024
Ripple is stuck under resistance at $0.48 for the sixth consecutive day, as seen on the daily chart. The altcoin has failed to break above the 23.6% Fibonacci retracement of its decline from the March 11 top of $0.7440 to the April 13 low of $0.4188, at $0.4955.Â
The closest support is the June 7 low of $0.4508, 5% below the current price level. The closest resistance lies at the Fair Value Gap, between $0.4825 and $0.4841.Â
The Moving Average Convergence Divergence (MACD) indicator is flashing red histogram bars under the neutral line, and the signal line has crossed above MACD. This reveals an underlying negative momentum in RippleÂ’s price trend.Â
XRP/USDT daily chartÂ
A daily candlestick close above $0.4955 could invalidate the bearish thesis and erase the recent losses, 3.28% in the past seven days. The altcoin could then rally towards the closest resistance at $0.4825.Â
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 arenÂ’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 RippleÂ’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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