XRP Price at Risk: SEC Challenges Ripple, Potential Drop to $0.42 Support Level

• The U.S. Securities and Exchange Commission (SEC) and former SEC lawyers have disputed Ripple’s positions on penalties and injunctions in an ongoing legal battle.
• This controversy arises amidst concerns that XRP’s price might plummet to its $0.42 support level due to broader market weaknesses.
• Notable experts and key SEC players have made significant arguments that highlight potential outcomes and repercussions for Ripple and the wider crypto market.

U.S. SEC challenges Ripple’s legal positions, stirring debates and speculations in the crypto community. Could XRP price face further declines?

SEC Intensifies Legal Pressure on Ripple

The U.S. SEC has filed a compelling response against Ripple Labs, arguing that the firm’s references to other settlements and the methods of calculating penalties are fundamentally flawed. Ripple is accused of comparing inapt cases and misrepresenting penalty bases as if these were directly reflective of sales or profits. Prominent crypto advocate Sherrie points out the SEC’s stance, emphasizing that unlike other cases, Ripple’s situation involves ongoing violations rather than ceasing activities under financial duress.

The SEC claims, “Resolutions where defendants return funds swiftly due to financial strain, as seen in the Terraform Labs case, cannot equate to those involving wealthy entities like Ripple who do not acknowledge violations.” This particular viewpoint from the SEC suggests a focus on the deliberate ought by Ripple to distance itself from the consequences while continuing to profit.

Remaining Disagreements on Penalty Amounts

Despite Ripple’s assertions, the SEC has clarified that the penalties requested should be significantly higher than the disputed $10 million cap proposed by Ripple. Their most recent filings indicate a potential penalty calculation of up to $102.6 million, standing by an original claim of over $2.04 billion overall. This significant discrepancy has been a core aspect of the SEC’s efforts to impose a formidable deterrent on Ripple’s activities.

Former SEC lawyers like James Farrell and Marc Fagel have also weighed in, underscoring that the potential penalties reflect the seriousness and scale of the alleged fraud.

Former SEC Officials Weigh In

Ex-SEC attorneys, including James Farrell and Marc Fagel, have publicly discussed the ramifications of possible injunctions on Ripple’s operations, particularly concerning its XRP On-Demand Liquidity (ODL) business. Farrell emphasizes that the court’s decision might lead to stringent compliance requirements even if Ripple’s current practices are deemed lawful. According to Fagel, hefty penalties are warranted to address the magnitude of alleged misconduct, irrespective of Ripple’s financial standing post-litigation.

Potential Implications on Ripple’s Business

The discourse from former SEC officials suggests that any imposed injunction could substantially disrupt Ripple’s business operations. This sentiment echoes in the broader financial community, with concerns that Ripple’s market positions and transactions could be heavily regulated or constrained by court orders. The broader pressure from these seasoned legal minds implies severe long-term impacts on Ripple’s market strategies and investor confidence.

Sustained Bearish Outlook for XRP Price

XRP is currently trading near critical support levels, under substantial bearish pressure. The cryptocurrency has remained below key exponential moving averages (EMAs) – specifically the 50-day, 100-day, and 200-day marks – signaling a continuation of the downward trend. Market analysts predict that if macroeconomic pressures and selling activities, particularly in Bitcoin, persist, XRP might drop further, potentially hitting the $0.42 support level. This bearish outlook gains traction as investor sentiments remain cautious amidst legal and regulatory uncertainties.

As of the latest market data, XRP is trading approximately at $0.48, with a slight uptrend of 0.40% over the last 24 hours. The 24-hour trading volume, however, has seen a notable decrease, reflecting market hesitancy.

Conclusion

The ongoing clash between Ripple and the SEC has significant implications for the future of XRP and the broader cryptocurrency market. With penalties and injunctions under intense scrutiny and debate, Ripple’s legal strategies and market maneuvers remain under the spotlight. Investors and market watchers need to stay informed as these developments unfold, understanding that the potential for further price declines remains high amidst regulatory and market pressures.