The SEC wants to investigate Ripple again: the effects on the price of the XRP crypto

The US market watchdog authority SEC has asked a New York judge to compel the transnational payment company Ripple to provide its financial statements for the period 2022-2023.

In particular, the federal agency is attacking institutional sales of crypto XRP, and is asking for measures to be taken to resort to remedies such as injunctions and civil sanctions.

Previously in July 2023, Judge Annalisa Torres had ruled that XRP, if sold to institutional clients, would be identified as unregistered securities.

Now Ripple has until January 17-19 to respond to the SEC’s enforcement action.
Let’s see how the XRP crypto has reacted to this new attack from the US commission.

All the details below.

SEC vs Ripple: the US agency requests to review the company’s financial statements

Yesterday, lawyers from the United States Securities and Exchange Commission (SEC) asked a federal court to compel the cryptocurrency payment company Ripple to produce documents related to the company’s financial reporting for the period 2022-2023.

The accusations of the securities watchdog commission refer to a previous judgment by Judge Annalisa Torres, who in July 2023 had established the non-connection between XRP and a security, excluding, however, the case of sales to institutional clients.

Referring to this last detail, the SEC is pressuring Judge Sarah Netburn of the United States District Court for the Southern District of New York to compel Ripple to produce contracts that regulate this type of sales, as well as summarize all cash flows recorded in the last 2 years.

In addition, the SEC stated that it would like Ripple to respond to a single interrogation (i.e., a formally written question) on the amount of proceeds it received from institutional sales after the SEC’s complaint was filed, but for contracts entered into before the complaint.

In the document published by the federal agency’s lawyers, it clearly states that 

“The SEC requests this limited and targeted discovery to assist Judge Torres in determining whether, having found Ripple liable for violating Section 5 of the Securities Act of 1933, […] the Court should impose remedies such as injunctions and civil penalties, and as to the latter, in what amount.”

Now Ripple has until January 17th to respond to the SEC’s motion for coercion, or perhaps until January 19th if the request for a 2-day extension is accepted.

What seemed like a practice that was already concluded and archived in October of last year, could reopen with the SEC still intending to put sticks in the wheels of the cryptographic company.

To underline how the latest attack by the US federal agency came just one day after the request for comment from Stuart Alderoty, Ripple’s legal officer, on the hacking of the SEC’s X profile and the publication of the fake news on the Bitcoin spot ETF.

Alderoty had challenged the federal agency to provide a comprehensive description of the nature, scope, timing, and potential impact of the incident within 4 days, as required by the Gary Gensler regulation for companies facing any type of cyber attack.

Who knows, maybe the SEC’s latest affront to Ripple comes as a response to the statement of the company’s legal officer

Analysis and forecasts of Ripple (XRP) crypto after the SEC move

Let’s now see how the crypto XRP has reacted to the motion filed by the SEC against Ripple’s activities.

According to Coinmarketcap data, the XRP coin is down 0.75% in the last 24 hours and has a market capitalization of $32.1 billion with an average trading volume of around $1.8 billion.

In the face of the news, XRP does not seem to have reacted particularly negatively: the crypto has lost points in the market but without significant downtrends.

Prices remain above the 4-hour EMA 50 and could react positively in the next few hours, surpassing the local high of $0.62 reached simultaneously with the listing of the first Bitcoin spot ETFs.

It is worth noting how the slight drop in Ripple prices came not only in conjunction with the news of the SEC’s persistence, but also at a time when BTC showed graphical weakness yesterday.

It is likely, therefore, that the move by the federal agency has had no effect on the price action of the currency led by Ripple, but rather has been influenced by the general drop in the crypto market.

4h chart of Ripple price (XRP/USDT)

As for the XRP forecasts, we can be slightly positive about the future of the cryptocurrency.

Expanding horizons and observing the XRP-USDT chart on a weekly time frame, we can notice how since June 2022 the crypto has formed an ascending channel in which prices record increasingly higher lows (at least for now).

Most likely, everything will depend on the price action of the king of the market, Bitcoin, which will drive the rise or fall of the markets throughout 2024.

At the moment the situation is generally positive, with the halving expected in April and the decrease in interest rates on US government bonds in May.

Unless particularly negative events occur in the coming months, we can already imagine a medium-term price of XRP above 1 dollar.

There will then be the possibility of seeing the crypto surpass its 2021 high of $1.96 if things go very well for the entire cryptographic industry.

A catalyst event that could give the necessary boost to Ripple’s currency to reach new highs would be the approval of a spot ETF for XRP, which could come if a listed exchange-traded fund for ETH is approved first.

Obviously, all of this still represents a remote hope without foundations, but it is not excluded that something could move among the main US Fund Managers in the coming months.

For bears, eyes are on the support level around $0.5, which if broken could lead to declines that would eventually attack the key level of $0.35.