Five Things to Know in Crypto This Week: Coinbase and Ripple in SEC Vice

BTC-Spot ETF Market Saw Net Inflows for Four Consecutive Days

BTC was up 4.17% to $70,025 from Monday (March 25) to Saturday (March 30). Significantly, BTC fell to a low of $66,413 before retaking the $70,000 handle.

BTC-spot ETF market flows in the shortened week ending March 28 drove buyer demand for BTC. The BTC-spot ETF market saw net inflows of $859.7 million (March 25 to March 28). The US markets were closed for Good Friday on March 29. In the previous week, the BTC-spot ETF market saw net outflows of $887.7 million.

However, BTC failed to strike an all-time high during the week. iShares Bitcoin Trust (IBIT) saw net inflows of $616.6 million in the week. IBIT had net inflows of $828.3 million in the week ending March 18 and $2,483.6 million in the week ending March 11.

Nonetheless, market conditions improved for FTBC, which saw net inflows of $610.5 million in the four-day week. FBTC saw net inflows of just $79.4 million in the previous week.

SEC vs. Ripple: SEC Opening Brief Called for $2 Billion Penalty

XRP was down 0.40% to $0.6300 from Monday to Saturday, bucking the broader crypto market trend. The total crypto market cap was up 4.04% to $2,568 billion from Monday to Saturday.

Investor reaction to the SEC’s remedy-related opening brief influenced buyer appetite for XRP.

On Tuesday (March 26), the SEC filed a redacted version of the remedy-related opening brief as a matter of public record.

The SEC gave argument for a punitive penalty for Ripple breaching Section 5 of the 1933 Securities Act. In July 2023, Judge Analisa Torres ruled Ripple sold unregistered XRP to institutional investors. Significantly, the SEC pushed for a $2 billion penalty and the court to prohibit Ripple from selling XRP to institutional investors.

The markets expected the SEC to push for a substantial penalty in response to the Programmatic Sales of XRP ruling. However, the SEC also argued that Ripple continued to breach Section of the 1933 Securities Act after the complaint.

Ripple must demonstrate that post-complaint XRP sales to institutional investors were to non-US investors to avoid a substantial penalty. In the case Morrison vs. NAB, the Supreme Court ruled the SEC only has jurisdiction over sales to US institutional investors. The opening brief appeared to focus on proceeds from XRP sales to all institutional investors.

Ripple must file its opposition brief by April 22 and a redacted version by April 24.

SEC vs. Coinbase: Court Partially Grants the Coinbase Motion to Dismiss

On Wednesday (March 27), Judge Katherine Failla partially granted the Coinbase Motion to Dismiss (MTD). Significantly, the Judge did not dismiss the charges for operating as an unregistered securities exchange. The ruling created more crypto market uncertainty, with Coinbase and the crypto market facing another lengthy trial.

As background, the SEC filed charges against Coinbase in June 2023 for allegedly operating as an unregistered securities exchange, broker, and clearing agency. Coinbase filed a Motion to Dismiss in August, arguing that the SEC lacks the statutory authority to regulate crypto exchanges.

Coinbase Chief Legal Officer Paul Grewal responded to the ruling by urging Congress to address the legislative void that plagues the US digital asset space. The court ruling was also bad news for Ripple and XRP. Legal experts believed the SEC would settle the Ripple case if Judge Failla granted the Coinbase MTD.

Coinbase shares ended the week up 3.76% to $265.12. However, Coinbase fell back from a Monday high of $283.48 as investors reacted to the court ruling. BTC-spot ETF market inflows and BTC price trends delivered the gains for the week.

MicroStrategy Rebounded with 11.92% Gain in the Week Ending March 28

MicroStrategy (MSTR) rallied 11.92% in the week ending March 28, partially reversing a 14.55% loss from the previous week. In contrast, NVIDIA (NVDA) slid by 4.17% to $903.56. The Nasdaq Composite Index declined by 0.30% to 16,380 in the week.

Despite heavy losses in the week ending March 18, MicroStrategy founder and Chairman Michael Saylor continued voicing his support for bitcoin. On Monday, Saylor set the tone for the week, saying,

“Still betting on Bitcoin.”

SBF Got 25 Years

Former CEO of FTX, Sam Bankman-Fried, received a 25-year sentence on Thursday. The court also ordered SBF to forfeit $11 billion in assets. US prosecutors were pushing for a 40-50-year sentence. The maximum sentence for the crimes was 100 years.

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.