This time the pressure comes from California regulators, putting the company at the center of legal attention once again.
With this accumulation of legal problems, the crucial question arises: What will Ripple do?
Ripple’s Political Chessboard: Senators vs. State Prosecutors
Ripple Labs Inc., CEO Brad Garlinghouse, and its subsidiary XRP II, LLC, are facing a new legal challenge in California. They are being charged for allegedly selling XRP without the necessary registration and violating securities laws. However, Ripple denies these allegations.
The lawsuit, filed in the Northern District of California, accuses Ripple of ignoring federal and state securities laws by offering and selling XRP without proper registration. The plaintiffs seek to represent two classes: the Federal Securities Claims Class and the California State Securities Claims Class, consisting of individuals and entities that purchased XRP between July 3, 2017 and June 30, 2023.
In response to the motion, Ripple refuted these allegations by claiming that XRP is not a security and therefore does not require registration.
This regulatory lawsuit puts Ripple on a tightrope. So far, Ripple has had the backing of many senators and legislative support, but the California case could complicate its winning path with the SEC. Ripple argues that XRP is not a security, but a digital currency for global transactions. The outcome of the case could determine how US regulators treat digital assets, with implications for the entire cryptocurrency market.
Investor’s Dilemma: Opt-out or Not?
Amid the new class action lawsuit, investors affected by the legal battle face an important decision. They have until April 5 to choose whether to opt out of the class action lawsuit against Ripple and pursue individual legal actions.
This choice underlines the far-reaching consequences of the lawsuit for both Ripple and stakeholders in the digital currency market.
Ripple’s legal troubles aren’t just limited to this class action; the company is also grappling with a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) in December 2020. The SEC accuses Ripple of conducting a $1.3 billion unregistered securities offering through the sale of XRP.
The regulatory tangle continues… Recent developments, such as digital asset exchange Kraken’s motion to dismiss the SEC’s lawsuit, further complicate the regulatory landscape. Kraken’s motion cites a ruling by Judge Torres on programmatic sales, which highlights the legal strategies deployed by investors and traders to address regulatory scrutiny.
Technical Analysis: What will Ripple do?
On the daily chart, the price has tested the upper limit of the major descending channel and the 200-day average around the $0.55 price mark. However, the 200-day moving average has rejected the price to the downside, and the market is likely to pull back towards the $0.50 level in the near term. The RSI falling below the 50% level is also a signal that such a correction is likely.
Looking at the daily timeframe of the Bitcoin pair, the situation looks much worse for Ripple. The price has been in a consistent downtrend since breaking below the 1300 SAT level.
The RSI has also been showing values below 50% for a while, indicating that the cryptocurrency is likely to fall even further in the coming months. The 800 SAT support level could be an achievable target in this scenario before the market finds a bottom.
While Ripple is in this dire situation, struggling with legal issues and an uncertain market position, there are other emerging coins that stand out and offer investors a chance for significant returns.
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Disclaimer: This article contains insights from independent authors and is not part of the editorial content of BitcoinMagazine.nl. This is not investment advice, please do your own research.
Source: https://bitcoinmagazine.nl/nieuws/ripple-rechtszaak-nieuwe-class-action-wat-gaat-ripple-doen
