The CPI Report reduced bets on Fed rate cuts in March and May. On Tuesday, 10-year US Treasury yields surged 3.28%, ending the session at 4.318%. The Nasdaq Composite Index slid by 1.80%.
However, XRP underperformed the broader market as investors consider ongoing SEC cases against Ripple and Coinbase. The total crypto market cap declined by 0.51% to $1,810 billion.
SEC Regulation by Enforcement and SEC Misrepresentations
On Tuesday, Ripple Chief Legal Officer Stuart Alderoty shared a post from Coinbase (COIN) Chief Legal Officer Paul Grewal, saying,
“Please read this thread from Coinbase’s Chief Legal Officer. Under Gensler and its Enforcement Director Gurbir Grewal (no relation), the SEC behaves as if it operates in a police state exempt from the consequences of its actions. Enough is indeed enough.”
Paul Grewal referenced the SEC cases against Debt Box and the SEC decision to file a Motion to Dismiss. The SEC filed the Motion to Dismiss after the court ordered “the SEC to show cause why it should not be sanctioned for making false and misleading representations to the court.”
It is unclear whether the presiding Judge in the SEC v Debt Box case will take further action. However, US lawmakers could scrutinize other SEC cases that could unravel SEC legal practices.
Grewal referenced sections from the SEC Motion to Dismiss, concluding,
“Dismissal without prejudice, and an hour or two of training, is hardly a sufficient remedy here. If this can happen in a federal case supervised by a federal district judge, just imagine what else is happening outside of Court oversight until they are made to stop. Enough is enough.”
In June 2023, the SEC charged Coinbase for allegedly operating as an unregistered securities exchange, broker, and clearing agency. Additionally, the SEC charged Coinbase for the unregistered offering and selling of securities in connection with its staking-as-a-service program.
SEC v Coinbase: Investors Await Ruling on Coinbase Motion to Dismiss
The SEC and Coinbase await a court ruling on the Coinbase Motion to Dismiss (MTD). Coinbase filed the MTD in August. Coinbase argued the SEC lacks the statutory authority to regulate crypto exchanges.
US Senator Cynthia Lummis filed an amicus curiae brief supporting the Coinbase MTD. Senator Lummis and four senators drew investor attention last week for targeting the SEC over the Debt Box case.
The US SEC Remains Under US Lawmaker Scrutiny
On February 7, five US Senators wrote to SEC Chair Gary Gensler regarding the SEC v Debt Box case.
Significantly, the letter stated,
“Regardless of whether Commission staff deliberately misrepresented evidence or unknowingly presented false information, this case suggests other enforcement cases brought by the Commission may be deserving of scrutiny. It is difficult to maintain confidence that other cases are not predicated upon dubious evidence, obfuscations, or outright misrepresentations.”
A trend of misrepresentations could force lawmakers to curtail SEC oversight powers and address an increasing list of issues highlighted by lawmakers and the courts.
However, SEC Chair Gary Gensler appears unfazed by recent events in the courts. On February 8, Fox Business journalist Eleanor Terrett shared an interview with Gary Gensler, saying,
“SEC Chair Gary Gensler said Wednesday he “absolutely” plans to stay on as Wall Street’s top regulator should President Joe Biden win a second term in November. I love this job, Gensler said in an interview from his office at the SEC’s headquarters in Washington.”
Ripple CLO Alderoty reacted to the post, saying,
“Who else would hire him? He’s politically toxic, he’s a serial loser in the courts, his staff has been caught lying to judges, his agency’s Twitter account was hacked in the most embarrassing way, and his sponsor at MIT quit because of close Epstein ties. Did I miss anything?”
Relations between the SEC and Ripple are tense, with the SEC v Ripple case ongoing since December 2020. Ripple and the SEC are progressing through remedies-related discoveries. Discovery must conclude by February 19.
XRP Price Action
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