- The SEC has recently gotten a small but significant win in the lawsuit.
- With Ripple’s initial win, things are largely balanced, but the lawsuit still holds the key to further gains.
XRP rose by 8% in 24 hours to trade at $1.56 at the time of going to press. The cryptocurrency has now gained 13% in the past seven days, but its further gains or losses are still dependent on the developments in the Securities and Exchange Commission (SEC) lawsuit against Ripple Labs.
The SEC lawsuit seems to be on a balance
Ripple’s case versus the Securities and Exchange Commission (SEC) has been the strongest determinant of XRP price trajectory. Concerned about the potential impacts of the Ripple trial playing outside the courtroom, the SEC has asked XRP holders to stop interfering with the case.
The SEC is concerned that heated action outside the courts will drag the case and increase the operational costs of the lawsuit. For example, the regulator has highlighted the application of aggressive measures against some entities in the secondary market. The SEC has already expressed its reservations against the participation of third parties in the case but lost the bid to have them barred by the court.
Back in March, the court allowed XRP investors to be enjoined in the case pitting the regulator versus Ripple Labs, in what was interpreted as a big blow to the SEC.
In the latest development, the SEC has argued that investors merely presented a summarised version of the Ripple lawyer’s arguments and failed to bring out new information. The biggest source of contention is the legal classification of XRP. The SEC argues that XRP is a security, while Ripple Labs’ defense line is that it isn’t any different from Bitcoin and Ethereum, whose decentralization frees them from such classification.
Following an initial favorable outcome in the pre-trial stages of the case, XRP soared to new highs, and Ripple Labs has applied for dismissal of the case. The next hearing of the case is scheduled for May 6th, and this could significantly affect XRP’s price.
One of the key developments in the lawsuit was the court’s decision to admit SEC documents relating to whether Bitcoin and Ether are securities or not. This helped propel XRP prices higher last month, and demand for the crypto-asset has risen significantly as a result. However, Judge Sarah Netburn has recently issued an order seen as favorable to the SEC.
The exclusion of SEC’s internal communications from the case is potentially a major turning point in the case. Depending on how much Ripple Labs relied on these as supportive evidence, XRP could either slip or remain unaffected.
Enhanced efficiency and safety key to growth
Elsewhere, Ripple has appointed former US Treasurer Fosie Rios as a director. They have also brought in Kristina Campbell to serve as the company’s Chief Finance Officer. These appointments are the company’s efforts towards strengthening its standing in the financial markets, which have been a strong pillar of its growth strategy, especially in the Asia-Pacific region. It will be remembered that Ripple’s impressive performance in the region gave investors hope at a time when XRP was entangled in the SEC lawsuit battle.
Insecurity remains a great concern in the crypto-sphere, with hackers and fraudsters making digital currencies unattractive to some potential investors and causing huge losses to some existing holders.
This week, XRP Forensics, a company that analyses and tracks XRP transactions, has revealed that millions of XRP were lost to scammers between December 2020 and April. The company, which also helps in the recovery of stolen XRPs, pointed out fraudulent giveaway schemes as the leading platforms for the lost assets.
According to the information provided, about 3.6 million XRP coins were lost during the period under review. This highlights the need to safeguard the XRP ecosystem from scammers and other external aggressors who may pile up the problems faced by Ripple.
Technical outlook
The Relative Strength Index (RSI) was at 64 but was headed down. XRP will likely find support at $1.47. It will encounter the first resistance at $1.62, but a further push by the bulls will push the price to attempt to breach the second resistance level at $1.65.
