Ripple’s Motion to compel SEC employees’ XRP transaction records DENIED

Key Takeaways:

  • The court denied Ripple’s Motion to compel SEC for documents regarding SEC employees’ XRP transactions.
  • Meanwhile, the SEC shared it does not oppose Ripple’s motion to seal certain portions of its response to the regulators interrogatories.
  • Ripple’s native token XRP gained 11% after falling 23% in three days.

NEW DELHI (CoinChapter.com) — In a blow to Ripple, Judge Sarah Netburn denied the defendant’s Motion to compel the SEC to share information regarding its employees’ XRP and other crypto transactions. Ripple believed the documents would prove its argument about the lack of clarity surrounding XRP’s status.

In a four paged order, Judge Netburn stated that the SEC had earlier produced a memorandum that provided “ethics guidance” on digital assets (XRP) to SEC employees under a previous order. Furthermore, the order said that the SEC does not dispute that it had no trading policy regarding digital assets before the memorandum.

Meanwhile, after markets reacted to the FUD surrounding China’s Evergrande group’s loan default, XRP prices fell below $0.85 on Monday. XRP slid further on Tuesday before recovering on Sept 22.

What The Order Says

In her order, Judge Netburn pointed highlighted Rule 26 of the Federal Rules of Civil Procedure, which provides that “parties may obtain discovery regarding nonprivileged matters that are relevant to any party’s claim or defense and proportional to the needs of the case.

In addition, the defendants argue that SEC employees’ trading decisions would highlight the confusion surrounding XRP’s status. Evidence of this would undermine SEC’s allegations regarding defendants’ actions and strengthen Ripple’s fair notice defense.

Also Read: US law enforcement targets crypto exchanges in and out of the country; Suex sanctioned.

The SEC responded that there was no determination by the SEC ethics counsel if a trade complies with securities laws in the preclearance decision process. Moreover, the SEC states that its employees’ trading activity documents are “preemptively confidential.”

Because the preclearance process does not consider whether an asset is a security, defendants have not shown that such individual trading decisions bear on the issues in this case.

Judge Sarah Netburn in her order

Judge Netburn further stated that the Ethics Counsel’s preclearance decisions could not justify intruding SEC employees’ financial conduct. According to a previous judgment quoted in the order, while retrieving information protected under the Privacy Act, the court must properly evaluate the policies underlying statutory protections.

As such, the order states that defendants fail to justify such a disclosure in the case. Additionally, regarding the annual certifications that Ripple seeks, Congress prohibited such disclosure from protecting government employees’ privacy.

The order directed the SEC to provide Ripple documents supporting the regulator’s statement that after issuing the formal order of investigation into Ripple, it prohibited its employees from trading XRP.

In a letter to Judge Sarah Netburn, the SEC said it would not oppose Ripple’s Motion to seal some parts of Ripple’s responses to the SEC’s second and third set of interrogatories. Furthermore, the regulator requested the court’s permission to file a motion to seal third-party submissions to SEC regarding these exhibits.

Meanwhile, Ripple price charts

Ripple slumped on Monday after the shockwave from China’s Evergrande Group’s debt implosion crumpled stocks and crypto markets alike. However, XRP rose 11% between low ($0.861) to high ($0.957) levels on Sept 22. Yet, the Ripple token is below its 50-Day (Red) and 200-Day (Green) moving average trendlines, making it bearish across all time horizons.

Also Read: MATIC rebounds 12% amid Bitfinex listing, Osprey’s Polygon Fund launch.

XRP fell 23% between Sept 19’s high ($1.098) and Sept 21’s low ($0.836). However, support at $0.864 held strong, and prices recovered. If the sell-off continues, a fall to support at $0.811 is likely. Further decline in XRP prices will bring the support at $0.767 in play, which would bring XRP to early August levels.

XRP prices recover after Monday's panic sell-off. Source: XRPUSD on Tradingview.com
XRP prices recover after Monday’s panic sell-off. Source: XRPUSD on Tradingview.com

If bulls attempt recovery, their first target would be immediate resistance near its 200-Day MA at $0.955. After breaking above immediate resistance, sustained bullish tailwinds would take XRP to $1.00 and target $1.05. Thus, the current short-term upside is at $1.05.

Once near $1.05, XRP’s 26-Day (Blue) Exponential MA would likely act as a dynamic resistance. Meanwhile, MACD for XRP has remained bearish since Sept 7. Bars on the MACD histogram increased in magnitude on the negative side. As such, it indicates that the MACD line (difference of 12-Day and 26-Day EMA) moved further below its signal line (9-Day EMA of MACD).

MACD remains negative for XRP. Source: XRPUSD on Tradingview.com
MACD remains negative for XRP. Source: XRPUSD on Tradingview.com

Closer inspection reveals the MACD line began moving upwards on Sept 22. However, a bullish crossover is not in the cards anytime soon. The relative strength index moved up as well, clocking 40.25 at the time of writing. Hence, XRP is safely above oversold regions for now.

At the time of writing, XRP was trading at $0.930, up 6.64% on the day.

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