Inside the SEC vs. Ripple Battle as the November 9 Deadline Looms

Ripple CEO Brad Garlinghouse shared his views on a Squawk Box interview with former SEC Chair Jay Clayton. Garlinghouse said,

“Watching this clip makes my blood boil. The hypocrisy is shocking. […]. (As a reminder, Jay Clayton brought the case against Ripple, me, and Chris Larsen. And left the building the next day).”

Garlinghouse referred to a Clayton interview from June 29, 2023. Clayton had this to say,

“If we’re not losing cases, if we’re not being pushed back on by the courts, we’re not doing enough.”

Clayton added,

“Unless we’re losing, we’re not bringing enough cases. That may be fine for private litigants against each other. When you have the power of the state, you’re supposed to only bring cases and only make rules that you think are going to pass judicial muster.”

Amicus Curiae attorney and CryptoLaw US founder John E. Deaton shared the Ripple CEO’s tweet, saying,

“The amount of restraint that Brad Garlinghouse is showing here has to make Stuart Alderoty very pleased with his CEO. It also demonstrates that I probably lack the temperament required to lead a top Fintech company in today’s world.”

Deaton shared his views on the Clayton video, saying,

“Finally, when you consider the hypocrisy of Clayton’s remarks, remember he filed a lawsuit claiming ALL XRP from the beginning of time until the end of the world was, is, and always will be securities, even though the SEC couldn’t cite a single case in history to support this absurd claim.

Deaton added,

“The SEC actually time-traveled and went into the future and said that even if a foreign country one day adopts XRP as a legal currency, it won’t matter – XRP would still be a security and anyone owning it would be in a common enterprise with Ripple. That’s right, Clayton and his cronies went so far, as to to usurp or void the sovereign powers of foreign nations. Anyone who supports OR minimizes this kind of behavior from regulators just because you don’t like the target is part of the problem.”

The latest comments come as the SEC and Ripple progress toward a briefing schedule.

Court Order Gives the SEC and Ripple Until November 9

As per the Court order dated October 24, 2023,

“By November 9, 2023, the parties shall jointly propose a briefing schedule with regards to remedies, or, if the parties cannot agree, shall jointly request that the Court set a briefing schedule.”

It is unclear whether Brad Garlinghouse’s reaction to the June 29 Clayton interview reflects the tone of behind-closed-doors discussions in moving toward a briefing schedule. The SEC aims for a $770 million settlement fee for Ripple selling unregistered securities to institutional investors.

Some crypto advocates suggest Ripple sits in a strong position. The Famous Hinman speech-related documents could give Ripple the upper hand in negotiations. The SEC made at least six attempts to shield the Hinman docs under attorney-client privilege before the court ordered the SEC to provide the documents under discovery.

As background, former SEC Director of the Division of Corporation Finance William Hinman said that Bitcoin (BTC) and Ethereum (ETH) are not securities. A Hinman connection with Simpson Thacher was the contentious issue. Simpson Tacher is part of a group that promotes Enterprise Ethereum. After leaving the SEC, Hinman returned to Simpson Thacher.

However, there is also speculation that the SEC is looking to expedite the case to appeal the Programmatic Sales ruling.

XRP Price Action

Daily Chart

XRP held above the 50-day and 200-day EMAs, sending bullish price signals.

A move through the $0.5470 resistance level would give the bulls a run at the trend line and the $0.5835 resistance level. Favorable SEC v Coinbase and Ripple case-related updates and BTC-spot ETF-related news will influence investor sentiment.

However, an XRP break below the 50-day and 200-day EMAs would support a move to the $0.5042 support level.

The 58.90 14-day RSI reading indicates a break above the trend line before entering overbought territory.

4-Hourly Chart

In the 4-hourly Chart, XRP remains above the 50-day and 200-day EMAs, reaffirming bullish price signals.

An XRP move through the $0.5470 resistance level would bring the trend line and $0.5835 resistance level into play.

However, a break below the 50-day EMA would support a move to the 200-day EMA and the $0.5042 support level.

The 4-hourly RSI, with a reading of 46.20, indicates an XRP fall through the 50-day EMA to sub-$0.5250 before entering oversold territory.