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- XRP could enter bull season as the SEC may not file an appeal brief against Ripple due to Trump's victory.
- SEC could approve XRP ETF with President-elect Trump potentially firing Gensler.
- XRP could rally to $0.6640 if it breaks above the upper boundary of a key trading channel.
Ripple's XRP is up over 5% on Wednesday and could extend its rally to $0.6640 as the Securities & Exchange Commission (SEC) may not file its appeal brief against the company due to Donald Trump's presidential election victory.
XRP bull season imminent after Trump's victory
XRP is more likely to continue its recent positive run after rising 5% in the past 24 hours following Donald Trump's victory in the US presidential elections.
The token, which has suffered several setbacks since the SEC sued its founding company, Ripple Labs, in December 2020, could be set for a major bull season in the coming months following the election results.
Ripple's CEO Brad Garlinghouse quickly congratulated Trump on the victory and suggested he fire SEC Chair Gary Gensler on his first day in office.
.@realDonaldTrump, Congratulations!
— Brad Garlinghouse (@bgarlinghouse) November 6, 2024
Some fodder for your first 100-day checklist to get things moving:
- Fire Gensler. Day 1, no delays.
- In his place, appoint Giancarlo, Brooks, or Gallagher – they’d be massive upgrades in rebuilding the rule of law (and reputation) at the…
During his campaign, Trump said he would fire Gensler and stop the agency's fierce regulatory actions against the crypto industry.
The SEC administration under Gensler was responsible for overseeing the agency's four-year battle against Ripple. Judge Analisa Torres concluded the case by dismissing claims that Ripple's sale of XRP to retail investors were unregistered securities and ordering Ripple Labs to pay a $125 million fine — miles away from the $2 billion the SEC requested.
However, the SEC filed a notice of appeal against parts of Judge Torres's ruling. Ripple countered by filing a cross-appeal challenging whether XRP transfers fall under the criteria for a Howey Test.
In a document posted by defense lawyer James K Filan, the court approved the SEC's request for appeal, but the agency must file its brief on or before January 15, or the case will be dismissed.
#XRPCommunity #SECGov v. #Ripple #XRP The Second Circuit Court of Appeals has entered an Order that the @SECGov’s brief must be filed on or before January 15, 2025. pic.twitter.com/E3TE5tBDAy
— James K. Filan (@FilanLaw) November 1, 2024
With Gensler potentially being demoted by Trump when he assumes office, it's unlikely the regulator will file the brief. Hence, effectively ending its case against Ripple Labs.
Meanwhile, several crypto community members are suggesting that the SEC will approve an XRP ETF in the coming months, with Gensler potentially gone and its court cases ending. Asset managers, including Bitwise, Canary Capital and 21Shares, had earlier filed for an XRP ETF after Judge Torres's ruling.
Meanwhile, Senator Elizabeth Warren defeated pro-crypto lawyer John Deaton, who was instrumental in defending XRP in its case against the SEC, to retain her seat in the Senate.
Ripple Technical Analysis: XRP could rally to $0.6640 if it breaks above key channel
XRP is trading near the $0.5400 psychological level, up 5% on the day, following $3.07 million in liquidations in the past 24 hours, per Coinglass data. Long and short liquidations accounted for $835,000 and $2.23 million, respectively.
The remittance-based token is moving within a key channel with an upper boundary extending from July 31 and a lower boundary from August 11.
If XRP fails to see a rejection near the $0.5608 resistance level where the 50-day, 100-day and 200-day Simple Moving Averages (SMAs) meet, it could tackle the upper boundary of the key channel near $0.5780.
XRP/USDT daily chart
A successful move above this upper boundary could see XRP rallying toward $0.6640.
The Relative Strength Index (RSI) is above its neutral level, indicating rising bullish momentum. The Awesome Oscillator (AO) is below its neutral level but could move above it soon. Crossing above the neutral level would strengthen the bullish pressure.
A daily candlestick close below $0.4860 will invalidate the bullish thesis.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023: 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 had to pay a $125 million civil fine.
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 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.