SEC continues scrutiny of digital assets, Ripple and Stoner Cats 2 face charges

© Reuters

The U.S. Securities and Exchange Commission (SEC) has maintained its aggressive stance in the digital asset space, most recently filing charges against Stoner Cats 2 LLC for conducting an unregistered offering of crypto asset securities in the form of non-fungible tokens (NFTs). The company reportedly raised around $8 million from investors to finance an animated web series. No court rulings were issued on this matter last Thursday.

In response to the SEC's latest action, Stuart Alderoty, Ripple's Chief Legal Officer, suggested that such actions might be more about public relations than substance. Ripple itself is currently awaiting a significant court ruling that could provide clarity on whether its digital asset, XRP, falls under SEC securities. This point has been a source of contention and uncertainty for both Ripple and XRP.

The markets are keenly waiting for Judge Torres's decision on the SEC motion for interlocutory appeal. If the judge denies the motion, it could prompt reflection within the SEC. The outcomes of this and another case involving Coinbase (NASDAQ:COIN) could significantly impact XRP and the broader digital asset market.

In other developments, XRP saw a 1.24% gain last Thursday, ending the day at $0.4894. Despite these gains, XRP remained below both its 50-day and 200-day Exponential Moving Averages (EMAs), indicating bearish price signals. However, court rulings in favor of Ripple and Coinbase could trigger a breakout for XRP. A break above the $0.5042 resistance level would support an XRP move toward the 200-day EMA and trend line.

In another case with potential implications for the digital asset space, markets are awaiting a court ruling on Coinbase's motion to dismiss. If Judge Failla grants the motion, legal expert John E. Deaton anticipates that lawmakers might compel the SEC to settle its case with Ripple and potentially end its enforcement campaign, which he believes is hindering innovation in the U.S. digital asset sector.

Without court rulings, XRP's fate remains tied to broader market trends. A slide to $0.45 could signal a move towards the $0.4322 support level. However, XRP's position above the 50-day EMA and below the 200-day EMA sends bullish near-term but bearish longer-term price signals.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.