SEC did not have a clue about XRP’s securities status, old email shows

"Ripple coin and dollar bills" by marcoverch (licensed under CC BY 2.0)
“Ripple coin and dollar bills” by marcoverch (licensed under CC BY 2.0)

Key Takeaways:

  • Ripple filed a motion in response to the SEC’s opposition to Ripple’s Motion to Compel.
  • An old email by SEC has come to light, which highlights SEC’s confusion regarding XRP’s status as security.
  • XRP registered its sharpest intraday fall in nearly two months on August 24.

NEW DELHI (CoinChapter.com) — In a turn of events that might make the U.S Securities and Exchange Commission scampering for cover, an old email has come to light which shows that XRP’s status as security was not clear till October 2020.

In detail, the SEC filed their lawsuit in December 2020, and one key point of the legal battle is the regulator’s stand that XRP has been acting as security since 2013.

In its response to the SEC’s opposition to its Motion to Compel, Ripple included this email. The defendants argue that the email refutes former director William Hinman’s testimony.

Although Ripple added another strike in its battle against the SEC, its native token XRP failed to respond. The Ripple token fell by 8.91% on August 24, its biggest decline since June 26.

Ripple v/s SEC Updates

In a letter sent to Judge Sarah Netburn, Ripple’s defense challenged the SEC’s use of DPP (Deliberative Process Privilege), which protects certain internal information of government agencies from disclosure during litigation. Ripple’s lawyers also argued that testimony of former director William Hinman and SEC’s internal documents would undermine the regulator’s allegations against Ripple and its executives.

According to the defendants, Mr. Hinman admitted that”application of the federal securities laws to digital assets was ‘new for everyone’ and ‘no one knew a whole lot.’” In his testimony, the former director noted that he told Ripple representative that he considered XRP sales as sales of securities. Ripple moved to strike on the record Mr. Hinman’s statement.

Also Read: Could Fed tapering cause a massive crypto market crash? The dollar answers.

However, in its August 23 letter, the defendants’ argued that Mr. Hinman’s personal views regarding XRP are dubious and refuted by SEC’s communications to the public.

In October 2020, the SEC replied to a query regarding XRP’s status as a security with an email that stated, “the SEC has not issued a determination on whether XRP is a security.” Interestingly, the SEC claims Ripple sold XRP as security since 2013, while the email is from 2 months before the regulator filed its lawsuit.

The email also mentioned that a cryptocurrency’s status as security depends on its characteristics and usage.

In May, the court ordered the SEC to reveal internal documents related to Bitcoin, Ethereum, and XRP, subject to a privileged assertion. However, the regulator argued that its internal documents are irrelevant to Ripple’s fair notice defense and allegations against its executives.

In its latest letter, Ripple’s attorneys alleged that the SEC ignored the court’s prior rulings. Additionally, the defense highlighted that ‘the court had not ordered sweeping discovery of the SEC.‘ Instead, the order refers to documents specific to the case.

The latest dispute comes when the deadline for fact discovery (August 31) and expert discovery (October 15) is looming close.

Meanwhile, Price Charts

XRP prices slipped below support at $1.3 on August 24, losing 13.4% between the day’s high of $1.267 and low of $1.117. However, support at $1.10 remains strong, and the 26-Day (Red) Exponential Moving Average acts as support near the critical $1.00 level.

Ripple's prices dropped by 8.91% on August 24. Source: XRPUSD on Tradingview.com
Ripple’s prices dropped by 8.91% on August 24. Source: XRPUSD on Tradingview.com

In addition, the 200-Day (Yellow) MA trendline provides support at $0.858. As XRP prices are trading above its MA trendlines, the Ripple token is bullish in all time horizons.

Also Read: MATIC mooning towards record highs as Polygon furthers entry into DeFi space.

XRP faces resistance at $1.35, a level the altcoin has breached only once since May 19. If bulls manage to break above, the next resistance is at $1.44

However, trend-based momentum oscillator MACD charted a bearish crossover for XRP on August 24. A bearish crossover occurs when the MACD line (difference between 12-Day and 26-Day EMA) moves below the MACD signal line (9-Day EMA of MACD).

XRP's MACD made a bearish crossover on Tuesday. Source: XRPUSD on Tradingview.com
XRP’s MACD made a bearish crossover on Tuesday. Source: XRPUSD on Tradingview.com

Bars on the MACD histogram moved below zero, highlighting XRP’s bearish crossover. A bearish MACD might create sell-off fears in traders, further pulling down prices.

The relative strength index for XRP lies in the neutral range with a value of 57.33.

The court has scheduled a telephone conference to discuss Ripple’s pending Motion to Compel against SEC in another update. The call will take place on Tuesday, August 31.

At the time of writing, XRP prices were $1.155, up 1.70% on the day.

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