XRP Unmoved by Ripple’s Cross-Appeal in the SEC’s Case 

Following the October 25 form C filing, XRP briefly slipped below the psychologically significant $0.50 mark but rebounded the same day and is currently trading above $0.51.

The token has dropped 15% since the beginning of the month, falling from $0.61 to the current $0.51. The biggest drop in price occurred on October 3 in the wake of news that the Securities and Exchange Commission was filing a notice of appeal in its longstanding lawsuit against Ripple, challenging Judge Torres’ verdict that XRP is not a security.

While XRP bulls may be hoping for a rebound, the general market sentiment around the token seems to be unsure about where it stands in the absence of positive developments in the SEC vs. Ripple case. As both parties had since appealed parts of the August 2023 ruling, the neverending legal battle over XRP status appears to be keeping investors on edge. 

At the same time, while XRP holders await how cross-appeals will turn out for both parties, they aren’t rushing to sell. According to CryptoQuant, the latest exchange inflows had been minimal, standing at $10 million as of October 28, a far cry from this month’s maximum of $15 billion on October 20. The data suggests that many investors may have adopted a “wait-and-see” approach rather than reacting immediately to every legal update. 

Exchange inflow tracks the amount of cryptocurrency, like XRP, being transferred to exchange wallets, which makes it a useful metric for gauging market sentiment. Large amounts of cryptocurrency flowing into exchanges would typically mean that holders are preparing to sell, potentially driving the asset’s price down. Current low inflows suggest that more holders are now committed to HODL, as most selling pressure was exhausted earlier this month when the SEC filed a notion of appeal. 

The Relative Strength Index also suggests that the selling pressure is waning, setting up XRP for a potential price surge. The current RSI at 38 is just slightly above the “oversold” threshold, so an upward reversal is not out of the question if the metric drops below 30. For now, it appears that XRP may be still under some selling pressure and that the bottom may be waiting ahead before the bullish turnaround. 

The RSI is one of the most popular tools used in crypto trading to identify oversold or overbought conditions. Represented as an oscillator, the indicator takes values in a range from zero to 100, where values below 30 suggest an oversold situation, while values above 70 indicate the overbought territory. 

Ripple’s appeal opens a new chapter in prolonged legal tussle

On Friday, Ripple’s Chief Legal Officer Stuart Alderoty confirmed in a post on Twitter/X that the company has filed a form C in the United States Court of Appeals for the Second Circuit to appeal parts of the ruling by Judge Torres. The move follows the notice of cross-appeal filed by the company earlier this month. 

The appeal challenges the court’s decision that its institutional sales of XRP constituted an unregistered securities offering, which resulted in a $125 million fine for the company. Ripple specifically disagrees with the court’s application of Howey’s test, a framework created by the Supreme Court to determine whether a transaction qualifies as an investment contract. 

The company also argues that Judge Torres in her verdict overlooked the broader regulatory uncertainty surrounding the application of securities laws to digital assets. The SEC also failed to provide a fair notice that XRP sales violated the said laws, Ripple claims. The filing requests a de novo review of the case, meaning that the appeals court will re-examine it from scratch, without relying on the previous findings or conclusions.

Alderoty emphasized that the SEC’s appeal is not challenging the district’s court ruling that XRP itself is not a security, a decision that remains a landmark win for Ripple. 

“As we go through this process, please remember the SEC’s broader strategy: try to create distraction and confusion for Ripple and the industry. But honestly, it’s just background noise now. The hard part of the fight is behind us. Ripple’s business is growing and getting stronger every day even as this appeal process plays out,” the lawyer added.  

Former SEC lawyer shares regulator’s perspective

Meanwhile, former SEC enforcer Ladan Stewart took the stage at Crypto Investor Day, an event held by entrepreneur and Bitcoin bull Anthony Pompliano, to talk about lessons learned after eight years at the agency. Stewart, who was part of the SEC’s high-profile cases against Coinbase and Ripple, now helps to defend crypto clients she was once litigating against. 

“When you come to this side and you realize that there are people who really want to find a way to work with regulators, and they feel like that’s just not possible, given you know who is at the helm of the SEC or generally the Biden administration. I think it’s just unfortunate, and it gets in the way of any effort toward reaching some regulatory clarity or anything that allows us to work toward building this industry,” Stewart said, as quoted by Fox Business’ Eleanor Terrett. 

Stewart’s moment of revelation about crypto companies actually looking forward to work with regulators was met with predictable ridicule from the side of Twitter/X crypto lawyers. Uniswap CLO Katherine Minarik pointed out that finding a way to work with regulators was precisely what the companies had been trying to do for years. 

Others were quick to point out that the “revolving door” between the government agency and the private sector creates a tremendous conflict of interest and paints regulators as a bunch of mercenaries who seem to no longer care about the preached values of fair play and transparency the moment they switch sides. 

SEC’s former Enforcement Director Gurbir Grewal, who stepped down from his role on October 11 after bringing more than 100 enforcement actions against the crypto industry over his 3-year stint at the agency, now holds a position at Milbank LLP as a litigation and arbitration attorney. Milbank currently represents Binance in its case against the SEC that Grewal himself brought as the agency’s official.