Unsealed Documents Favor Ripple and XRP
It’s been a busy start to the year for Ripple Lab and XRP, with plenty of legal activity delivering XRP support. The SEC v Ripple case, which has been ongoing since late 2020, has gained momentum in recent weeks, supporting a recovery from a January low $0.55.
SEC v Ripple News Remains XRP Positive
Earlier in the month, Ripple had won a number of key motions deemed to be critical to Ripple Lab’s defense. The courts ruled in favor of the unsealing of two key documents. Ripple Lab believed that these would shed light on the SEC’s classification of XRP back in 2012. To date, the SEC continues to allege that Ripple Lab raised over $1.3bn through an unregistered, ongoing digital asset securities offering.
As Ripple Lab makes progress in its defense, there have been a number of key events that have also favored Ripple Lab and XRP.
Late last year, we reported on Empower Oversight filing a lawsuit against the SEC. Empower Oversight alleged that former SEC officials were biased against Ripple Lab and XRP in favor of Ethereum (ETH).
In late January, non-U.S. XRP Investor lawyers petitioned for an investigation into the SEC’s actions against Ripple Lab, also XRP positive. As we reported, the petition claimed that “the SEC enforcement actions on cryptocurrencies have involved the appearance of improper ties and conflicts of interest among officials, and should be investigated”. Importantly, the petition also points out that petition attorney John Deaton “has compiled evidence that SEC officials may have colluded with outside parties to regulate cryptocurrencies in line with their personal financial interests”.
Both actions against the SEC focus on the conflict-of-interest issue that could prove pivotal in the Ripple Lab case.
2012 Unsealed Documents XRP Supportive
Last week, two legal opinions from Perkins Coie LLC became public as a result of a recent court ruling. The first of the two documents was in relation to NewCoin and the second Ripple Network/OpenCoin.
Legal Document 8th February 2012
Perkins Coie LLC concluded that:
Coins that are purchased are likely to be prepaid access: Coins could become subject to regulation as “prepaid access” under the Bank Secrecy Act. This regulates providers and sellers of prepaid access.
Any Coins sold to investors could be considered securities: “If sold to Investors who provide Founders with the capital necessary to launch and operate NewCoin, Coins will likely be considered securities and subject to regulation under federal securities laws”.
Coins not initially sold may still constitute securities if sold at a later date: Coins could be considered securities when sold on the secondary market at a later date.
Additionally, Coins may become commodities: Should contracts for future delivery of Coins be developed, they will likely be classified as commodities under the Commodities Exchange Act.
Regulators could treat exchanges as money transmitters or currency exchangers.
Legal Document 19th October 2012
From the second legal document, Perkins Coie provided the following opinion:
“Although we believe that a compelling argument can be made that Ripple Credits do not constitute securities under the federal securities laws, given the lack of case law, we believe that there is some risk, albeit small, that the SEC disagrees with our analysis”.
The SEC failed to make a move until December 2020, in spite of the Perkins Coie opinions.
Brad Garlinghouse took to Twitter following the unsealing. Garlinghouse stated that the SEC waited 8-years to disagree with the opinions, “decimating thousands and thousands of XRP holders (who they purport to protect) in the process”.
The truth is out for everyone to read. What we see is that the SEC waited 8 years to decide they disagreed with this analysis, decimating thousands and thousands of XRP holders (who they purport to protect) in the process. So much for being mission-driven… https://t.co/VjGeyMxDy2
— Brad Garlinghouse (@bgarlinghouse) February 19, 2022
General counsel for Ripple Lab, Stuart Alderoty also took to Twitter. He added “The conclusion of these public 2012 memos is clear: XRP do not constitute securities”.
The conclusion of these now public 2012 memos is clear: XRP “do not constitute securities.” 1/2 https://t.co/hufsu0QRs0
— Stuart Alderoty (@s_alderoty) February 18, 2022
Alderoty went on further by tweeting “The fact that Ripple had the foresight to seek legal advice from a prominent firm in 2012 – in the absence of clear case law and 5 years before the SEC even started talking about digital assets – should be applauded”.
The fact that Ripple had the foresight to seek legal advice from a prominent firm in 2012 – in the absence of clear case law and 5 years before the SEC even started talking about digital assets – should be applauded. 2/2
— Stuart Alderoty (@s_alderoty) February 18, 2022
XRP Price Action
At the time of writing, XRP was up by 2.10% to $0.7930. Avoiding the day’s $0.7891 pivot would bring the first major resistance level at $0.8109 into play. XRP will likely face plenty of resistance at $0.8000, however. In the event of an extended breakout, XRP could test resistance at $0.85 before any pullback. The second major resistance level sits at $0.8451.
A fall back through the day’s $0.7891 pivot would bring the first major support level at $0.7549 into play. Barring an extended sell-off, however, XRP should steer well clear of the day’s major support levels. The second major support level sit at $0.7331.
Looking at the EMAs and 4-hourly candlesticks (below), the signal remains bullish. The 50-day EMA flattened on the 100-day EMA and 200-day EMAs after narrowing through Sunday. For XRP, avoiding a fall back through the 100-day EMA currently at sub-$0.78 levels will be key near-term.
A break back through the 50-day EMA, current at $0.79 levels would support a run at February’s high $0.9154.
This article was originally posted on FX Empire
More From FXEMPIRE:
Russia: Credit Risk Hinges on Design of Any Tougher Sanctions