Ripple could cross the line and violate securities law says judge, slaps firm with $125 million fine


  • SEC vs. Ripple lawsuit ends with Judge Torres ruling that Ripple is likely to violate the law with their willingness to push boundaries.
  • Judge slammed Ripple with $125 million in fines for institutional sales of XRP, a federal securities law violation by the payments firm. 
  • XRP broke through $0.60 resistance, erasing recent losses, while Bitcoin and Ethereum struggled under key support on Thursday. 

Ripple (XRP) led gains among top 10 cryptocurrencies on Thursday after a historic court ruling in the Securities & Exchange Commission (SEC) lawsuit. Judge Analisa Torres considered the likelihood of the payment remittance firm violating federal securities law in the future and hit Ripple with a $125 million penalty. 

Daily Digest Market Movers: Ripple lawsuit ends, but SEC could appeal ruling

  • Ripple lawsuit ended with Judge Analisa Torres asking the firm to pay $125 million in penalties for the likelihood that it eventually crosses the line by violating federal securities law in the future. 
  • As traders digested the news of the SEC vs. Ripple ruling, pro-crypto attorney Fred Rispoli explained that Judge Torres recognized the absence of litigation in her final ruling. 
  • In her ruling, Judge Torres says that “The Court finds that Ripple’s willingness to push the boundaries of the order evinces a likelihood that it will eventually, if it has not already crossed the line. On this balance the Court finds that there is a reasonable probability of future violations, meriting the issuance of an injunction."
  • The ruling judge slammed Ripple with $125 million in fines, and predicted a “violation” is likely, if it hasn’t occurred already. 
  • Attorney Rispoli interprets this as Judge Torres telling the two parties, "You two better work out on your own whatever is happening now. I'll be pissed if you come back to me."
  • SEC could appeal Judge Torres’ ruling in the lawsuit. 
  • XRP has received legal clarity in the final ruling. However, an appeal could change that and influence investor confidence and demand for the altcoin negatively. 

Technical analysis: XRP could rally to $0.75, November 2023 peak

Ripple rallied above key resistance at $0.60 and trades at $0.62 at the time of writing. The altcoin could extend gains by over 19% and hit its November 2023 peak of $0.75 in its attempt to break out of the multi-month downtrend. 

The XRP/USDT daily chart shows that the altcoin has attempted to break out of the downward trend. A daily candlestick close above $0.61 could validate the bullish thesis. Relative Strength Index (RSI) reads 60.42, well above the neutral level. 

XRP faces resistance at $0.66, the 50% Fibonacci retracement of the decline from the July 13 top of $0.93 to the July 5 low of $0.38.

Ripple

XRP/USDT daily chart 

Ripple could find support at the Fair Value Gap (FVG) between $0.51 and $0.57, as seen in the XRP/USDT daily chart. 

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.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

US presidential election outcome could shape the future of crypto

US presidential election outcome could shape the future of crypto

US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).

More Cryptocurrencies News
Bitcoin Price Forecast: BTC recovers as Donald Trump takes lead on polls

Bitcoin Price Forecast: BTC recovers as Donald Trump takes lead on polls

Bitcoin (BTC) slightly recovered to around $68,800 on Tuesday, following a shift in the United States presidential race that saw former President Donald Trump regain the lead, after US spot Bitcoin ETFs experienced an outflow of over $540 million on Monday.

More Bitcoin News
Crypto markets brace for volatility in tight race between Trump and Harris

Crypto markets brace for volatility in tight race between Trump and Harris

The US presidential election is one of the most significant events in the world. Due to the influence of the country’s political decisions, policies, and economic approaches, it can significantly impact crypto and global markets. 

More Cryptocurrencies News
Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

MAGA (TRUMP) trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption

More Cryptocurrencies News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP