XRP holders have filed a motion against the U.S. Securities and Exchange Commission (SEC) for misrepresenting them in the ongoing lawsuit against Ripple.
Investors Seek Damages for the SEC’s “Misconduct”
Ripple is back in the crypto spotlight after a group of token holders requested to join the SEC lawsuit against the firm as third-party defendants.
In the new legal filings, XRP holders argue that their interests have not been properly represented by the SEC in the ongoing lawsuit. The group now plans to seek damages for the regulatory watchdog’s “intentional misconduct and/or gross negligence” since the charges against Ripple led to significant losses after the token lost more than $15 billion in value.
XRP holders’ attorney John Deaton maintains that Ripple is not the only party at risk because many investors have not been able to liquidate their holdings.
“It is not just Ripple’s current distribution of XRP that is at issue, but whether present day XRP owned by XRP Holders are considered securities, because most U.S. exchanges have delisted and/or suspended XRP trading entirely, thereby causing the XRP held by XRP Holders untradeable and, thus, useless. The SEC had an opportunity to amend the Complaint and provide clarity to the markets but, instead, deferred that responsibility to this Honorable Court,” said Deaton.
Although U.S. District Judge Analisa Torres denied the motion “without prejudice,” she included a pre-motion letter for the SEC to respond.
The federal agency requested an extension until Mar. 22 to release an official statement. In the meantime, XRP token holders could file another motion to intervene in the SEC v. Ripple case as Deaton is convinced that these individuals need to be considered.
XRP Stuck in Narrow Trading Range
The probability of token holders can act as third-party defendants in the lawsuit has generated a lot of speculation in the market. XRP surged by more than 19.50% after the news broke.
Despite the significant price spike, the seventh-largest cryptocurrency by market capitalization remains stuck within a narrow range. Its inability to move past the $0.485-$0.424 pocket has forced the Bollinger bands to squeeze on the daily chart.
Squeezes are indicative of low volatility periods and are usually succeeded by significant price movements. The longer the squeeze, the higher the probability of a strong breakout.
This technical index does not provide a clear path about the direction of XRP’s trend. Therefore, the area between the lower and upper band is a reasonable no-trade zone.
Only a daily candlestick close above or below this area will determine where XRP is headed next.
An increase in demand that allows this cryptocurrency to break through the $0.485 resistance level could be significant enough to push prices towards the next major interest area at $0.653. Conversely, closing below the $0.424 support level may lead to a 26% correction towards $0.315.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.