Ripple's Legal Battle Nears as SEC Faces Internal Shifts

Highlights

• SEC's legal team overseeing the Ripple case sees key reassignments, signaling a shift in regulatory focus
• Crypto Task Force aims to redefine digital asset classifications, influencing XRP’s legal status
• XRP price movement hinges on critical technical support, with potential for a breakout

The U.S. Securities and Exchange Commission (SEC) has undergone a significant reshuffling, potentially altering its stance on cryptocurrency enforcement. A senior litigator involved in multiple high-profile cases, including Ripple, has been reassigned to the agency’s IT department. Another key attorney, linked to drafting strict accounting rules that restricted banks from offering digital asset custody, has also been relocated.

These developments coincide with leadership changes within the SEC, particularly following the departure of former Chair Gary Gensler. Under his tenure, the SEC pursued an aggressive approach toward digital asset firms, favoring regulatory enforcement over structured guidelines.

The restructuring could impact the ongoing legal dispute between the SEC and Ripple. Legal experts and market participants are assessing whether the agency will maintain its appeal against the ruling that XRP does not qualify as a security in transactions involving retail participants. If the appeal is dropped, it may mark a major turning point for the cryptocurrency sector’s regulatory landscape.

SEC's Crypto Task Force and XRP’s Classification

SEC Commissioner Hester Peirce, now leading the agency’s newly formed Crypto Task Force, has initiated a review of digital assets to determine which tokens classify as securities. This reassessment may directly impact Ripple’s ongoing case, as the classification of XRP remains a crucial point of contention.

Judge Analisa Torres previously ruled that XRP sales to institutional investors fell under securities laws, whereas transactions involving retail participants did not. The SEC’s argument for an appeal hinges on challenging this distinction. However, with the recent internal restructuring and the Crypto Task Force’s review process underway, the likelihood of a prolonged legal battle appears to be diminishing.

If the task force ultimately determines that XRP does not constitute a security, the case against Ripple may effectively conclude. The broader implications extend beyond Ripple, influencing how other digital assets are classified and regulated moving forward.

XRP’s Market Reaction and Price Prospects

Amid legal uncertainties, XRP has experienced heightened market volatility. Data from Coinglass indicates that XRP futures liquidations reached $11.68 million within 24 hours, with long positions accounting for a significant portion.

From a technical perspective, XRP is trading within a broadening wedge pattern. A successful rebound from the lower boundary could trigger an upward move, potentially setting the stage for a rally. Should XRP break past key resistance levels, projections suggest a climb toward new highs.

Conversely, failure to hold above the support level could introduce downside risks, with the next support zone positioned near $1.35. The token's price movement will largely depend on regulatory developments and market sentiment in the coming weeks.

The SEC’s internal reshuffling and the establishment of a dedicated Crypto Task Force indicate a possible shift in regulatory priorities. With key litigators reassigned and a fresh review of digital asset classifications underway, the agency’s approach to Ripple’s case remains uncertain.

If the SEC withdraws its appeal, it could remove a major legal hurdle for Ripple and reshape the regulatory outlook for the broader cryptocurrency market. Meanwhile, XRP’s price trajectory will be closely tied to technical factors and evolving regulatory developments.