SEC v. Ripple: Cryptos are crashing, but ‘eyes on the ball’

Rick Steves

While investors may be looking for a trigger for a new bullish run, what the industry wants is regulatory clarity.

new-york-city

Digital asset investors that have been holding cryptocurrencies and other tokens for longer than the most recent bullish run have held steady throughout the extreme ups and downs, twists and turns that the emerging asset class has offered them.

This week’s sharp drops in price for most cryptos doesn’t come as a big surprise for long term investors. Institutional adoption, however, could have made an impact on the volatility.

Fintechs and financial services firms have been launching offerings that include leveraged trading of cryptocurrencies. When investor confidence gets shaken, this becomes a recipe for disaster, especially in this asset class.

It remains to be known how many retail investors blew their accounts this week like many other leveraged traders found themselves even with negative account balances during the extremely volatile weeks of the March-April panic triggered by the COVID-19 pandemic.

This hot topic is certainly being discussed among industry leaders that are gathered today and tomorrow at the iFX Expo Dubai, an event that FinanceFeeds is covering live.

After the negative publicity Elon Musk provided Bitcoin – regarding its energy inefficiency which has led Tesla to take down BTC as a payment method) and his SNL stunt about Doge Coin, the cryptocurrency market may have started to lose some of the confidence gained since the bullish run that claimed a $2 trillion market cap.

Many within the space may be looking for some positive news to trigger a bounce and the timing of the SEC v. Ripple lawsuit may come into play.

A number of motions have been filed, back and forth, throughout the last weeks. Ripple’s co-founders have filed to dismiss the complaints against them individually.

The SEC, however, charged back against them, doubling down on the accusations in a recent memorandum of law stating they understood the nature of the asset, XRP.

Prior to that, Ripple had put the SEC to shame in the latest legal round by exposing their omissions and misrepresentation of the Judge in the SEC’s motion to strike Ripple’s lack of due process and fair notice affirmative defense.

A few days ago, the SEC filed another objection to XRP holders’ Motion to Intervene, arguing they are “no friend” to the court. This has raised, once again, indignation among XRP holders.

Can Ripple settle with the SEC in the next two weeks?

Attorney Jeremy Hogan, a lawyer who has been covering the SEC v. Ripple lawsuit from the beginning, has predicted that if the new SEC Chair, Gary Gensler, chooses to settle with Ripple, that should happen within the next two weeks.

“My prediction is that if Gary Gensler is going to pull back from this lawsuit and instead work for more regulatory clarity – it will happen in the next 2 weeks.

“If we go into June with no settlement then this lawsuit has been adopted and supported by Chairman Gensler for better or worse. If that is the case I predict no settlement until September at the earliest”, he continued.

“If there is no settlement and we go to summary judgment or trial I predict…well, heck I don’t know – do I look like a mind reader?”

FinanceFeeds covered Mr. Hogan’s remarks in March, when he raised attention to two bombshells dropped by the Judge, consenting on XRP’s currency and utility value. With currencies and securities being two different things, the SEC’s argument that Ripple is security may lose its credibility.

While investors may be looking for is a trigger for a new bullish run, what the industry wants is regulatory clarity.

A settlement should signal the SEC’s intention to provide exactly that, probably with the help of fellow regulatory entities and Congress.

Another way would be to pursue the lawsuit to its fullest extent and bring it to the Supreme Court, in case Ripple’s arguments prevail in the Southern District of New York and on appeal.

A Supreme Court decision could overturn the Howie test, which is used by US regulators to define what is or not a security.

Read this next

Digital Assets

AAX ranked world’s second largest spot exchange, only behind Binance

Crypto trading volumes experienced their first surge in activity since March as the majority of digital assets began their recovery from the recent grim price action, according to a new report by Cryptocompare.

Digital Assets

Bitpay teams up with Cardlytics to provide 15% cashback rewards

Crypto payment service provider Bitpay announced a partnership with Cardlytics Inc (NASDAQ:CDLX), which it says will offer more rewards for BitPay cardholders on its platform.

Digital Assets

BlackRock digs further into crypto with spot bitcoin private trust

BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, has launched a spot bitcoin private trust for institutional clients in the United States.

Digital Assets

SEC fines Bloom Protocol, orders refund to BLT token purchasers

Blockchain startup Bloom, which raised $30 million in funds via an initial coin offering (ICO), has agreed to return the money to token purchasers and pay a $300,000 fine, the SEC announced.

Institutional FX

FX volume takes step back at Singapore Exchange in July

The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for July 2022.

Market News

The Week Ahead: 12 August from David Madden, Market Analyst at Equiti Group

There was a spike in volatility last week when the US CPI report ticked down to 8.5% from 9.1%, missing the forecast of 8.7%. The announcement led to chatter the Fed might not carry out a 0.75% interest rate hike in September.

Digital Assets

Pomelo Pay adds crypto payments capabilities from TripleA

According to a June survey conducted by Deloitte, nearly 75% of retailers plan to accept either cryptocurrency or stablecoin payments within the next two years.

Executive Moves

Talos appoints “boss, mentor, and friend” Neal Pawar as strategic advisor

“Foundational technologies are needed for institutions to fully embrace this potential, however, and in my opinion Talos’s platform is steadily becoming the de facto industry standard for digital asset trading.”

Technology

Avelacom enhances Middle East connectivity amid new market trends

Avelacom found that smaller markets in the region were not sufficiently covered by third-party vendors.

<