Ripple (XRP) piled losses alongside top altcoins and Bitcoin early on Friday. The German governmentÂ’s Bitcoin transfers and Mt.Gox payback to creditors have created uncertainty among traders and increased the pressure on Bitcoin and altcoins like XRP.Â
The latest developments in the Securities and Exchange Commission (SEC) vs. Ripple lawsuit are skewed in favor of the payment remittance firm, with Judge Amy Berman Jackson treating Judge TorresÂ’ 2023 ruling as precedent in the SEC vs. Binance suit.Â
XRP NPL and Supply on exchangesÂ
Ripple is in a downward trend since March 11. The altcoin dipped to its lowest level in fifteen months, at $0.38, early on Friday. The altcoin erased gains from earlier in 2024 amidst a marketwide correction in cryptocurrencies.Â
Ripple could find support at the March 21, 2023, low of $0.37 if it extends losses further. XRP is down 7% on Friday.Â
XRP/USDT daily chartÂ
On the contrary, a daily candlestick close above $0.4611 could invalidate the bearish thesis and push XRP higher toward the next psychologically important resistance at $0.50.
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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