XRP Pulls Back Ahead Of SEC's Reply Brief: Investors Await Clarity

The digital currency XRP, tied to the company Ripple Labs, had a small decline over the weekend, which resulted in many speculations about the course of actions that might be taken by the U.S. Securities and Exchange Commission (SEC). The excitement is revolving around the reply brief that the SEC is to submit on May 6, which is yet another twist in the ‘Ripple vs. SEC’ legal narrative.

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Anxious Investors Await SEC’s Next Step

The following brief will illuminate the position of the SEC, providing desirable details concerning the strength of its case against Ripple. This comes after a plethora of legal actions launched by both parties from the time that the initial complaint was filed by the SEC in December 2020. Significantly, the SEC filed an opening brief in March that detailed the allegations of securities law violations by Ripple and requested punitive measures and an injunction against the financial technology company.

In reaction, Ripple submitted an opposition brief countering the claims made by the SEC and pointing out procedural errors in the regulatory body’s filings. Worthy of note, Ripple emphasized compliance with the regulations by conducting post-complaint XRP sales to accredited investors only via on-demand liquidity (ODL) arrangements, proclaiming adherence to the appropriate securities laws.

Ripple Faces Potential Regulatory Hurdles Amid an Ongoing Legal Battle

The reply brief is set to impact market dynamics as the Ripple community and crypto investors wait for the SEC’s next course of action. If the SEC presents compelling evidence to back its allegations, XRP could experience an increase in selling pressure, which will be due to doubt concerning its regulatory status.

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Concern extends to the possibility of an injunction prohibiting Ripple from selling XRP to institutional investors, which could seriously sabotage the company’s U.S. market expansion plans. Regulatory hassles of this sort are going to reflect badly on investors, adding to the selling power of the altcoin.

When reporting, XRP was quoted at $0.5277, meaning a 2.35% fall from its peak on Saturday, data from TradingView reveals. While the stakeholders are preparing themselves for the SEC’s reply brief, the cryptocurrency market is in a dilemma, waiting for the situation to be clear about the lingering legal battle between Ripple and the regulatory authorities.