Settlement Speculation and SEC Appeal Strategy Impact XRP Price

The CoinShares Digital Asset Flows report shows that XRP-based funds received $300,000 in capital inflows last week. In the same period, the two largest assets by market capitalization recorded negative flows: Bitcoin recorded capital outflows worth $159 million and Ethereum funds lost $28.9 million.

The increasing capital inflows into XRP are indicative of the demand among institutional investors. XRP traders are watching developments in the appeal of the Securities and Exchange Commission’s (SEC) lawsuit against the payment remittance company.

Speculation about a possible settlement in the SEC case against Ripple likely cushioned XRP’s downside. Conversations about a possible deal provoked interest. XRP community member JackTheRippler published on X:

“Ripple and the SEC’s legal hearings may be completed within the specified appeal period of 14 days.”

The SEC filed its Notice of Appeal on October 2, which the United States Court of Appeals for the Second Circuit entered on October 4.

The filing listed the July 2023 summary judgment and the August 2024 final judgment. It is convincing that the SEC is targeting the summary judgment to discuss a higher penalty.

In August 2024, pro-cryptocurrency lawyer ‘James’ MetaLawMan’ Murphy quoted two likely rulings that the SEC could challenge:https://twitter.com/MetaLawMan/status/1821558354004566173

The first ruling concerned the court denying the SEC’s request for a refund of $1.1 billion. Murphy observed this as a blow to the SEC. In its initial brief regarding remedies, the SEC argued that the court should impose a barrier penalty. The SEC highlighted Ripple’s refusal to accept liability and public statements since the July 2023 summary judgment.

However, Murphy also believed that the agency would challenge the ruling on programmatic XRP sales. In August 2023, the SEC filed a temporary Appeal Motion, asking the court for permission to challenge the Programmatic Sales ruling. In October 2023, Judge Torres denied the motion. However, the ruling on programmatic sales could be a bigger blow to the SEC.

Former SEC lawyers noted that the ruling on programmatic XRP sales was crucial.

One lawyer stated: “The SEC will ‘likely’ appeal Judge Torres July 2023 ruling on programmatic XRP sales in the Ripple case in part because everyone there [at the SEC] believes the decision is wrong, which is not good law and must be appealed.”

Comments from former SEC attorneys suggest that the SEC focuses more on the programmatic sales ruling. By default, the fine could be higher if the agency wins the appeal.

XRP is likely to remain under pressure until the SEC and Ripple court filings. Speculation about the SEC’s appeal strategy and court documents will influence the XRP lawsuit. If the SEC appeals the ruling on programmatic XRP sales, XRP could fall to $0.40.

Conversely, if the SEC withdraws its appeal, XRP could rise towards $1.00, reflecting the price action following the programmatic selling ruling.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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