Ripple and the SEC: A New Chapter in Cryptocurrency Regulation
Final Settlement Update on Ripple vs. SEC Case
Stuart Alderoty, Ripple’s Chief Legal Officer, has announced what he calls his ‘final update’ regarding the protracted legal battle between Ripple, a major blockchain enterprise, and the U.S. Securities and Exchange Commission (SEC).
In his recent statement, Alderoty confirmed that the SEC has decided to drop its appeal against Ripple without any conditions. Concurrently, Ripple has chosen to withdraw its cross-appeal, a development he shared via a social media update on March 25.
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Details of the Settlement Agreement
According to the settlement terms, the SEC will retain $50 million of the initially imposed $125 million fine on Ripple. This amount has been held in an interest-bearing escrow account, and the remainder will be returned to Ripple.
Furthermore, the SEC intends to petition the court to lift a previously sought injunction that restricted certain activities related to Ripple’s XRP sales. However, these actions remain contingent upon a Commission vote, the finalization of documents, and standard court procedures.
In Alderoty’s words, “The final crossing of t’s and dotting of i’s – and what should be my last update on SEC v Ripple ever.” He also noted the agency’s intention to request the lifting of the standard injunction initially imposed at the SEC’s request.
Implications of the Legal Settlement
In July 2023, a federal judge ruled that Ripple’s institutional sales of XRP violated securities laws, though its programmatic sales did not. The SEC had initially demanded a $2 billion fine, but the imposed $125 million fine was significantly lower, leading both parties to appeal.
The mutual decision to drop these appeals is partly influenced by the emergence of a more cryptocurrency-friendly administration and Gary Gensler’s departure from the SEC.
Future Prospects for XRP and Market Dynamics
What Lies Ahead for XRP Price?
XRP’s value has historically been sensitive to legal rulings in its battle with the SEC, often experiencing increased capital inflows. The current resolution, viewed as a significant triumph, may potentially propel the token to new price heights.
Upon news of the SEC dropping the appeal, XRP initially surged. However, the broader market downturn prevented it from reaching the $3 resistance level, resulting in a rapid drop in market capitalization. Despite this, XRP is on the brink of becoming the third-largest digital asset by market cap, closing in on Tether.
Legal clarity might pave the way for the approval of a spot exchange-traded fund (ETF). Multiple entities have submitted applications to the SEC, and a decision is anticipated in October. Such an investment vehicle could attract substantial institutional capital, with some estimates suggesting an XRP ETF could draw in approximately $8 billion by 2026.
Despite these positive indicators, skepticism persists within a segment of the market. A report from Finbold highlighted a contentious view by cryptocurrency researcher Aylo, who labeled XRP as “the biggest financial scam,” asserting that the token lacks the necessary qualities to support its current market valuation.
XRP Price Analysis
As of the latest data, the legal developments have not significantly affected XRP’s market price. The asset is trading at $2.47, marking a 1.3% increase over the past 24 hours and a 6% rise over the week.
In terms of short-term projections, market sentiment remains optimistic, bolstered by the token’s 50-day Simple Moving Average (SMA) at $2.39, indicating a short-term upward trend. The long-term perspective is similarly positive, with XRP’s 200-day SMA considerably lower at $1.729. The 14-day Relative Strength Index (RSI) stands at 52.87, suggesting a neutral position for XRP.
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