What SEC’s Latest Appeal Means for Ripple and XRP

The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has drawn significant attention, especially regarding its implications for the cryptocurrency industry. In a landmark ruling earlier this year, the court decided that Ripple’s XRP token was not a security when sold on secondary markets, marking a partial victory for Ripple. However, the SEC recently filed an appeal challenging certain aspects of this decision. This appeal raises critical questions about the future regulatory landscape for cryptocurrencies and whether XRP, and other digital assets, could ultimately fall under the SEC’s jurisdiction. Understanding the stakes of this appeal is crucial, as it could reshape how cryptocurrencies are classified and regulated in the U.S.

Understanding SEC vs. Ripple Appeal

The U.S. SEC filed a Notice of Appeal to Judge Analisa Torres’s ruling ordering Ripple to pay the SEC $125 million in fines, which was significantly less than the SEC’s initial demand of nearly $2 billion.

This recent ruling was part of a partial win for the SEC following the July 2023 verdict, in which the judge ruled that XRP was not a security when sold to retail investors, but sales to institutional customers constituted an illegal securities offering.

On September 4, Ripple requested the court to allow a stay of the $125 million judgment with the SEC until 30 days after the time to appeal expires or the resolution of any appeal. It appears Ripple suspected the SEC would appeal Judge Torres’s ruling.  

The SEC appeal aims to overturn the decision favouring XRP, which classified it as a non-security when sold to retail investors. This means the lawsuit has not yet been resolved, and the SEC is potentially aiming for the neck again.

What SEC Appeal Means for XRP Price

Following the news of the SEC appeal, the price of XRP experienced a sharp drop, further exacerbated by the general market drop due to escalating conflict in the Middle East. XRP price today is trading at $0.517, down 13.8% in the last 24 hours. 

The price chart shows the asset broke to the downside of an ascending triangle, invalidating the bullish setup. There is some temporary support of around $0.5, but if selling pressure persists, the XRP price may drop further to the next level of support at around $0.42.

XRP Price Prediction Hints 18% Drop Risk to $0.42

XRP price has decisively broken below a critical ascending trendline, which had been acting as support since early July.  The $0.65 level was a strong resistance area, as shown by multiple rejections. With this latest rejection, the price is now heading toward lower support levels.

Key Support & Resistance Levels

• $0.425: Immediate support, marking an 18.97% potential drop from the current level. This target is highlighted by the green zone on the chart.
• $0.65: Resistance lies at this previous high, which will be tough to break unless significant buying volume returns.

The Relative Strength Index (RSI) is trending below 40, showing oversold conditions, but there’s still room for more downside before a rebound can be expected. The RSI at 30.06 suggests some caution as a bounce might occur once it reaches oversold levels. The On-Balance Volume (OBV) line is also declining, which indicates further potential weakness in buying pressure.

Given the breakdown of the ascending trendline and the clear rejection at resistance, the most likely scenario in the short term is a drop to $0.425. This aligns with the measured move from the recent breakdown.

Ripple’s Response

Ripple CEO Brad Garlinghouse criticized the SEC appeal, calling it misguided and irrational. According to Garlinghouse, the SEC does not want to admit they have lost.

“Somehow, they still haven’t gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.” Garlinghouse said.

Further, Ripple CLO Stuart Alderoty expressed his disappointment at SEC’s move but noted that it was not surprising. Ripple plans to continue defending its position to the end as Garlinghouse notes that the FinTech company has already secured the most important win— classification of XRP as a non-security.

SEC Appeals: Timeline and What to Expect Next

Pro-XRP lawyer Fred Rispoli said Ripple will cross-appeal, urging the XRP community to remain calm but refrain from voting for Kamala Harris and Tim Walz as SEC’s company-ending lawsuits would most likely continue under a Harris-Walz administration.

Rispoli also shared a potential timeline for the SEC v. Ripple case moving forward.

• SEC Brief Due: December 2, 2024, or January 1, 2025 — The SEC will submit its detailed arguments for the appeal. 
• Ripple Cross-Appeal Brief — Due at the same time as the SEC brief, in which Ripple responds with its counterarguments.
• Opposition Briefs: February 2, 2025, or March 2, 2025 — Both parties will submit additional documents opposing each others arguments.
• Reply Briefs: End of March 2025— Final responses from both sides.
• Oral Argument: September-October 2025 — Both parties will present their cases in court before the judge.
• Ruling: January 2026 or March-April 2026 — The court will make a final decision on the appeal