It would seem that every other day has a major development around the corner in the ongoing case between the United States Securities and Exchange Commission and Ripple Labs. In what is the latest spanner in the works, the SEC has now filed a new motion before the court of Judge Sarah Netburn, a motion requesting an order permitting additional depositions.
What’s more, the agency is also asking the court to compel Ripple to search the records of more custodians, while also demanding that the defendants produce records of post-complaint XRP transactions and its lobbying efforts.
The aforementioned filing, the sheer scope of it, was met with a lot of surprise by many in the community, especially since there were some rumors of a possible settlement after the teleconference on Friday.
According to the SEC’s submission, its request for additional discovery is in proportion with the “needs of the case,” with the agency adding that “key components of Ripple’s unlawful distribution of XRP was diffused through multiple employees.” The SEC, the motion went on to argue, wants to obtain critical information on 1) Creation and promotion of an XRP trading market, 2) Ripple’s communications with market participants to ascertain whether Ripple offered ‘investment contracts’ under Howey.
In making the said submission, the SEC is now seeking to depose the likes of Ron Will, Ethan Beard, Phil Rapoport, and Ryan Zagone, among others, since they will have “non-duplicative knowledge of critical issues.”
Most tellingly, perhaps, Jorge Tenreiro, the counsel for the SEC, has also requested the court to produce certain documents post-dating the filing of the SEC’s complaint against Ripple Labs. According to Tenreiro, while Ripple has repeatedly argued that its efforts do not affect the price of XRP, the firm did concede to using publicly available data about the price of XRP post the filing of the complaint to make its arguments.
“Given these arguments and Ripple’s refusal to limit its expert opinion to pre-Complaint XRP prices, Ripple should be ordered to produce documents relating to its activities as to XRP since the Complaint was filed, so that the SEC may rebut Ripple’s arguments that there was no correlation between its own activities and the price of XRP.”
Finally, the SEC has now also requested the Court to have Ripple Labs produce evidence of its “lobbying efforts to affect public perception on the regulatory status of XRP.” The filing claimed,
“Since Ripple has put at issue its purported lack of “fair notice” based on the beliefs of market participants, the SEC is entitled to test whether the supposed “confusion” was bought and paid for by Ripple, as opposed to a reflection of genuine market sentiment.”
The reactions to the SEC’s submissions, understandably, were strong, with one user tweeting,
“Looks like the SEC is ramping up its fishing expidition bc, like @attorneyjeremy1 said, they’re scared of the “Fair Notice” defense. I sense they don’t feel they have enough to defeat that defense atm so time to through out the fishing net?”
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SEC, Ripple, XRP Lawsuit update: This is ‘something obviously the SEC does NOT want to see happen’
The ongoing case between the United States SEC and Ripple Labs was already seeing a lot of back and forth before John Deaton and XRP Holders filed a motion to intervene. While the defendants, for their part, have come out in support of the movants’ motion in “limited capacity,” the regulatory agency has vigorously argued…
The ongoing case between the United States SEC and Ripple Labs was already seeing a lot of back and forth before John Deaton and XRP Holders filed a motion to intervene. While the defendants, for their part, have come out in support of the movants’ motion in “limited capacity,” the regulatory agency has vigorously argued against both the motion and Ripple’s “limited participation” idea.
The SEC’s latest response to both has fueled quite a reaction within the crypto-community, with most on the fence with respect to what they expect might happen next. Jeremy Hogan, however, isn’t one of them, with the popular attorney recently going on Twitter to air his views on the agency’s response to XRP holders’ motion to intervene.
According to Hogan, the aforementioned response “jumped the proverbial shark,” with the attorney implying that the SEC’s latest argument is unlikely to fly and be accepted by the court in the present case. Here, the argument that Hogan was referring to was the allegation that Ripple and Deaton and XRP holders are in cahoots with each other and are colluding to beat the SEC.
Such an allegation is an extension of similar statements made by the SEC in the past. In fact, in its initial reply to Deaton’s motion to intervene, the agency had accused the movants of “reciting” the defendants’ litigation position. Even in its present response, the SEC has alleged that the movants won’t be impartial and objective participants, with the agency adding,
“….. Movants would act as friends of the defendants, not true friends of the court.”
It’s worth adding, however, that for his part, Hogan seemed to agree with the SEC’s contention that XRP holders shouldn’t be “injected as full litigants.” Instead, he said,
“I think the Judge should (and will) grant limited “amici” participation – something obviously the SEC does NOT want to see happen.”
Hogan, ergo, seemed to side with Ripple’s conditions for XRP Holders’ participation in the present case.
The popular attorney also took issue with the fact that the SEC has failed to recognize the value of the new insights and facts the movants might be able to bring to the said litigation.
What does the SEC’s latest response, the sheer tone and animosity of it, mean for the prospect of settlement, however? Well, according to the attorney, “it doesn’t change anything.”
Finally, Hogan observed,
“Lawyers are not supposed to make baseless accusations against opposing counsel yet, here we are…”
This is a telling statement to make, especially since something similar was implied by the intervenors’ latest memorandum of law against the SEC’s opposition. In his submission to the court, Deaton had claimed that he was being “unfairly targeted as an unhinged conspiracy theorist crusader.”
Matic & Loopring: Why these projects matter to Ethereum’s performance
With ETH’s price back in the $2900 range, there has been a lot of debate on the level of security Layer 2s provide, their long-term ROI, and the sustainability of their price rally. After crossing the $4000 level on May 12, the price dropped, several times and the scaling solutions’ have rallied. Consider the analogy,…
With ETH’s price back in the $2900 range, there has been a lot of debate on the level of security Layer 2s provide, their long-term ROI, and the sustainability of their price rally. After crossing the $4000 level on May 12, the price dropped, several times and the scaling solutions’ have rallied.
Consider the analogy, someone with $100 can save or store it in several ways as they would like. There is the option of storing it in a wallet, keeping it in a bank, or in the security of a vault. However, with Ethereum, a trader with $100 worth of ETH would have to use all ways at once – store in a wallet, bank and vault at once. Does that make it inefficient and unnecessary?
What L2 solutions do is that they offer the option of one way instead of many, making it efficient. These L2 solutions are projects like MATIC, Loopring, OMG. All three projects have offered high short-term ROI since the launch of ETH L2. In the case of MATIC, the number of transactions and the transaction volume have increased significantly since the launch.
The altcoin now ranks 14 in the top 25. The transaction volume for nearly all three projects has increased, on account of significantly high fees of settling transactions on the ETH network. According to data scientist @ASvanevik, MATIC has the largest inflow of stablecoins of any Ethereum address in the last 7 days. This signals increasing demand for MATIC, while the price rally extends beyond the 105% from last week.
In the case of Loopring based on the following data from Lunarcrush.com, the Galaxy Score Trend, a combined measure of health, quality and performance, is at 63, lower than the peak it hit the second week of May 2021. The social volume has dropped considerably and the demand across exchanges has dropped. It is anticipated that once the social volume recovers and trader sentiment is neutral, Loopring would offer high short-term ROI like other L2 scaling solutions.
L2 solutions are likely to remain relevant for a long time; as ETH transaction fees remain high, traders and ETH Maxis have been bullish about MATIC and Loopring. MATIC already offers side chains and plasma and has a roadmap to introduce optimistic and Zk rollups in the future which is likely to increase ease of use. In the war of L2 scaling solutions, ease of use is the key factor, after demand and ROI. Long-term ROI is anticipated to be high for ETH and scaling solutions alongside it.
What’s next for XRP’s price following these court proceedings
The ongoing legal battle between the SEC and Ripple has been somewhat of a rollercoaster for XRP traders and HODLers. There is uncertainty in the price of the altcoin, as a result of this legal debacle. The SEC has argued from the beginning of this enforcement action that XRP is a security. The impact of…
The ongoing legal battle between the SEC and Ripple has been somewhat of a rollercoaster for XRP traders and HODLers. There is uncertainty in the price of the altcoin, as a result of this legal debacle. The SEC has argued from the beginning of this enforcement action that XRP is a security.
The impact of the recent updates is that XRP’s price is at $1.44, down nearly 5% in the last 24 hours. There has been an increase of nearly 50% in the trade volume in the last 24 hours. The altcoin’s price is nearly 62% below the ATH of the $3.84 level based on data coinmarketcap.com.
The social volume hit a peak several times, following updates from the SEC vs Ripple hearing. It has dropped to 16258 based on the above chart, following SEC’s argument that XRP holders are actually XRP investors. This is akin to an attack on XRP HODLers’ portfolio given the impact on the ROI in the short-term. (Ironically, the SEC’s motto is to “protect investors”)
Based on the above chart, XRP traders have earned less than 15% ROI in the past 30 days and that makes it less profitable than most altcoins in top 10. Similarly, for HODLers who accumulated when the price was at $1.9 level, they are currently unprofitable. The volatility has nearly dropped, with a few spikes following updates from the hearing. At the same time, XRP’s correlation with BTC and ETH is above 80%. This has helped the altcoin’s price sustain at the $1.6 level against the selling pressure on spot exchanges.
In its latest filing, the response from SEC makes the hostile stance towards XRP traders clear. The updates in court proceedings have by no means safeguarded the interests of XRP traders. The short-term ROI is expected to drop further following updates.
The enforcement action brought by the SEC may have never been intended to protect or negatively impact XRP’s price, however, at a time when nearly every mid to small-capitalization altcoin is rallying this summer, XRP’s rangebound price action is largely a result of the SEC proceedings against Ripple.
XRP traders have responded to this action, by consistent demand across spot exchanges and the market capitalization is currently above $51 Billion, the altcoin ranks 7 and there are currently no signs of dropping below the top 10.
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