SEC Requests Ripple’s Financial Statements
The US Securities and Exchange Commission (SEC) has asked a New York judge to compel Ripple, the transnational payment company, to provide its financial statements for the period 2022-2023. The SEC is specifically targeting institutional sales of the crypto XRP and is seeking injunctions and civil sanctions as remedies. In July 2023, Judge Annalisa Torres ruled that XRP would be considered unregistered securities if sold to institutional clients. Ripple now has until January 17-19 to respond to the SEC’s enforcement action.
SEC vs Ripple: Request for Financial Statements
The SEC has requested documents related to Ripple’s financial reporting from 2022-2023. The commission is pressuring the court to compel Ripple to produce contracts that regulate sales of XRP to institutional clients and provide a summary of cash flows over the past two years. The SEC wants Ripple to respond to a written question about proceeds from institutional sales made before the SEC filed its complaint. The SEC aims to determine if remedies such as injunctions and civil penalties should be imposed on Ripple for violating securities laws.
Analysis of Ripple’s Reaction
Following the SEC’s actions, XRP has experienced a slight decrease in value but without significant downtrends. The cryptocurrency remains above the 4-hour EMA 50 and may react positively in the coming hours, potentially surpassing its local high of $0.62. It is important to note that XRP’s price drop coincided with a general decline in the crypto market, including Bitcoin. Overall, XRP’s future depends on Bitcoin’s price action in 2024, but positive factors such as the upcoming halving and decreasing interest rates on US government bonds could contribute to a medium-term price above $1.
Hot Take: Ripple’s Future and XRP Price Forecast
Ripple’s currency, XRP, has shown resilience despite the SEC’s actions. The approval of a spot ETF for XRP could be a catalyst event that propels its price to new highs. While this remains a remote possibility, it is not excluded that US Fund Managers may show interest in the coming months. For bearish scenarios, support levels around $0.5 and $0.35 are key areas to watch for potential declines. However, if positive market conditions persist, XRP could exceed its 2021 high of $1.96 and potentially reach a medium-term price above $1.
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