Ripple vs SEC Settlement Speculation Grows Following SEC’s Upcoming Closed Meeting

The U.S. Securities and Exchange Commission (SEC) is preparing for a closed meeting scheduled for Thursday, August 8. The agenda of this meeting includes items that could potentially impact the ongoing legal battle between the SEC and Ripple Labs.

Speculation Mounts Over Possible Ripple Settlement

The SEC’s agenda for the closed meeting includes the “institution and settlement of injunctive actions” and “resolution of litigation claims.” These agenda items have fueled speculation about a possible settlement in the SEC vs. Ripple case. The case centers around the SEC’s allegation that Ripple conducted an unregistered securities offering through its sales of XRP.

Notably, Ripple’s leadership, including CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty, have maintained radio silence on social media platforms since July.

$2 Billion Penalty or Smaller $10 Million Settlement

The potential for a settlement has significant implications for Ripple and the broader crypto market. A key issue at stake is the penalty Ripple might face for violating U.S. securities laws. In March 2024, the SEC filed a remedies-related opening brief seeking a $2 billion penalty and an injunction to prevent Ripple from selling XRP to institutional investors. Ripple countered in April 2024 with an opposition brief, proposing a much smaller $10 million penalty based on post-complaint activity.

The outcome of this meeting could also affect the SEC’s plans to appeal against the July 2023 ruling by Judge Analisa Torres. This decision stated that while Ripple violated securities laws by selling XRP to institutional investors, programmatic sales of XRP to retail investors did not satisfy the third prong of the Howey Test and thus were not considered securities transactions.

A favorable settlement could have far-reaching effects on XRP’s price and Ripple’s future operations. It could potentially allow Ripple to avoid the hefty penalty and injunction sought by the SEC. This could make easy for the company to expand their plans in the United States. Moreover, a settlement would likely end the SEC’s plans to appeal the programmatic sales ruling. This would provide more regulatory clarity for XRP and possibly setting a precedent for other cryptocurrencies.

Where Would XRP Be After Settlement?

The cryptocurrency market has already begun to react to these developments. XRP, Ripple’s native cryptocurrency, ended a six-day losing streak on Tuesday, August 6, advancing by 3.55% to close at $0.51. 

The 20-day Exponential Moving Average (EMA) at $0.5548 is acting as immediate resistance, while the 50-day EMA at $0.5396 could provide support if there’s a pullback. The 100-day and 200-day EMAs are clustered around the $0.5336 level, which could serve as a strong support zone.

The Relative Strength Index (RSI) is currently at 42.74, indicating that XRP is neither overbought nor oversold. This leaves room for potential upward movement if positive news emerges from the SEC meeting.

Based on the current technical setup and the fundamental catalyst of the SEC meeting, XRP could see increased volatility in the coming days. A positive resolution for Ripple could see XRP potentially retake the $1.00 handle, reminiscent of its surge to $0.9527 following the July 2023 court rulings. However, if the news disappoints, support levels at $0.5000 and $0.4800 could come into play.

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