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.

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📊 Ripple funds note $300,000 in inflows ➡️ https://t.co/wGLDiVjx98#Forex #Crypto #Stocks pic.twitter.com/rc1GhrYbcr

— FXStreet News (@FXStreetNews) October 7, 2024

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.”

🚨BREAKING: The @Ripple and SEC legal proceedings may potentially conclude within the designated 14-day appeal timeframe! #XRP pic.twitter.com/mINI1DJvNj

— JackTheRippler ©️ (@RippleXrpie) October 7, 2024

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.

Initial thoughts on the SEC Appeal:

1. Big mistake by the SEC. It will appeal the programmatic sales ruling and IF it wins, it will get more money from Ripple and have protected no one. Ripple will raise its "Blue Sky" law issue and, if it wins, the SEC's ability to regulate…

— Jeremy Hogan (@attorneyjeremy1) October 3, 2024

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.