Crypto News

Ripple’s Legal Battle Nears Conclusion: Will XRP Rally to $4 Following Key SEC Developments?

February 6, 2025
Smart Money

SEC Restructuring Sparks Speculation on Ripple Case Outcome

In a significant move that could impact the future of cryptocurrency regulations, the U.S. Securities and Exchange Commission (SEC) has recently reassigned a key litigator involved in its ongoing case against Ripple Labs. This realignment has sparked speculation among crypto advocates that the contentious litigation between the SEC and Ripple may soon come to an end.

Review of Crypto Asset Classifications Underway

Following a restructuring led by acting Chair Mark Uyeda, the SEC is working to streamline its Crypto and Cyber Unit, which previously included over 50 lawyers and support staff. As reported by the New York Times, Jorge Tenreiro, the former deputy chief of this unit and a prominent figure in the agency’s legal battles against crypto firms, has been transferred to the SEC’s IT department. This reassignment also includes a lawyer linked to creating controversial guidelines that hinder banks from offering custody services for digital assets.

SEC Commissioner Hester Peirce, who now leads a newly formed Crypto Task Force, emphasized the agency’s commitment to reassessing which cryptocurrencies qualify as securities. Peirce’s statement suggests a potentially more lenient approach towards crypto classifications, raising hopes among Ripple supporters that XRP may be deemed a non-security. If XRP is classified as such, it could mark a significant victory for Ripple, potentially halting the SEC’s appeal against Judge Analisa Torres’s earlier ruling, which stated that XRP sales to retail investors do not constitute securities.

Market Reaction and XRP’s Potential Recovery

The cryptocurrency market is reacting to these developments, with XRP experiencing a slight dip of 3% early Thursday, accompanied by a wave of futures liquidations totaling approximately $11.68 million in the past 24 hours, according to data from Coinglass. Some industry analysts believe that if XRP can maintain its position above the lower boundary of a descending broadening wedge on its daily chart, it could stage a budding recovery and potentially rally to new heights, with an upper projection target of $4.00.

The performance of XRP is being closely monitored, as it navigates within a descending broadening wedge pattern, which is traditionally seen as a bullish indicator. For a successful recovery, XRP must bounce off its lower support line and overcome several resistance levels, including the 14-day Exponential Moving Average (EMA) and price points at $2.72, $2.95, $3.40, and $3.55. Conversely, if XRP fails to hold this lower boundary, it could plunge to support around $1.35.

Despite the bearish momentum indicated by various technical indicators, including the Relative Strength Index (RSI) and the Stochastic Oscillator, a decisive move above neutral levels could strengthen the case for upward price movement.

Implications for Ripple and the Broader Crypto Industry

The reconfiguration of the SEC’s approach towards cryptocurrencies, particularly its shift from a ‘regulation by enforcement’ tactic under former Chair Gary Gensler, raises critical questions about the future landscape of cryptocurrency regulations in the United States. As the agency’s focus shifts, it could lead to more clarity and potentially favorable conditions for fintech entities like Ripple.

Ripple Labs, the creator of the XRP token, has been at the center of this regulatory drama, as it navigates legal challenges that could reshape its business model. The company’s use of blockchain technology aims to simplify cross-border remittances, and XRP plays a vital role in facilitating transactions on the XRP Ledger.

While the recent changes within the SEC appear to signal a potential easing of regulatory pressures, the crypto community remains watchful of further developments in the ongoing Ripple case. The outcome of this litigation may set important precedents that could influence regulatory approaches towards the entire cryptocurrency market.

Conclusion

As the SEC reviews its stance on cryptocurrency classifications and adjusts its internal structure, the implications of these actions will be closely monitored by investors and industry stakeholders alike. The fate of XRP and the broader ramifications for the crypto sector may hinge significantly on the conclusions drawn by the SEC’s newly formed Crypto Task Force. The market remains volatile, and for XRP investors, the next steps could either lead to a resolution or a renewed phase of uncertainty.