Tempers flare

Robinhood is spoiling for a fight after the U.S. Securities and Exchange Commission put the trading app platform on notice about an impending civil action aimed at its crypto arm.

The company’s executives wasted no time firing back. "If necessary, we will use our resources to contest this matter in the courts with the intent of both defending our crypto business and establishing regulatory clarity in the U.S.," said Robinhood's CEO, Vlad Tenev, in an X post.

Earlier this week, Tenev revealed the company received a Wells Notice from the SEC. He decried what he described as an "improper" regulatory "onslaught."

In a show of support, John Rose, a U.S. Congressman from Tennessee, called SEC chief Gary Gensler a "rogue regulator" exceeding his mandate.

This week, crypto sector participants are having a field day on social media ripping into a federal regulator increasingly viewed as being on a scorched earth campaign. Last year’s courtroom defeat in the battle with Grayscale over spot Bitcoin ETFs did not slow the SEC's roll. Gensler,  in a televised exchange of barbs with reporter Andrew Ross Sorkin, bristled at the suggestion that the SEC had an outsized bone to pick with an undersized segment of financial markets. Crypto may be niche in terms of total market size but remains overly rife with fraud, Gensler insists.

The agency has scored its share of victories. For example, Coinbase lost its bid to throw out agency charges pertaining to violations of investor-protection rules.

“The SEC is extending its regulatory reach over the digital asset industry without proper congressional authorization,” said The Digital Chamber in a statement.

Jake Chervinsky of the Variant Fund posted: “The number of Wells notices that the SEC have sent about crypto in recent months is astonishing. It's hard to imagine that they would (or could) bring so many enforcement actions at once. It seems like they're abusing the Wells process as a scare tactic now.”

Resurgent Bitcoin couldn't steal the thunder from AI-related coins, including Fetch.ai (FET) and Render (RNDR).

The latter is one of the biggest gainers on the week. Render is a distributed network for GPUs critical to the rapid processing involved in running AI programs. Render's native RNDR, 28th-largest digital asset, has gained 42% since last Wednesday, the 1st of May, a day on which crypto cratered.

Recall how Bitcoin went from above $60K to below $57K. BTC has since rebounded by 8%.

During the same span, Fetch.ai's native FET, 22nd-largest coin, gained 16%.

Fetch.ai is positioned as a P2P platform for AI apps. FET's all-time high came in late March when it reached $3.45. Only a few weeks later, FET was below $2.

As of this morning at 8:15 a.m. (EST), FET was $2.25. Most of the climb came over the weekend, lasting through last night. In the past 24 hours, FET has fallen about 7%.

Demand for Nvidia's graphics processors for servers has pushed shares of the stock into the stratosphere. NVDA gained 238% in 2023. Shares are up 66% so far this year.

Yesterday, though, NVDA shares plunged by as much as 10% after a famous hedge fund investor, Stanley Druckenmiller suggested the chipmaker's run likely has reached its pinnacle and that it was time to take profits off the table.

Not everyone agrees the juggernaut has peaked.

“AI is underhyped,” said Eric Schmidt, former CEO of Google, speaking to CNBC’s Squawk Box.

The case of SEC vs. Ripple is trudging inexorably toward a conclusion. Various remedies-related briefs are due to be filed in the coming week.

A final judgment might come in September, courtroom watchers theorize, assuming there is no settlement reached prior to that.

Earlier this week, the regulator filed one last retort to a Ripple reply to an earlier SEC request that Ripple pay $2 billion in penalties.

The road to this end-game stage has been as circuitous as it has been contentious.

The SEC sued Ripple in 2020 over allegations that the technology company illegally offered XRP which the SEC claims is an unregistered security.

The court battle became, and remains, one of the most closely watched cases on a crypto-related docket starting to resemble a seafood tower.

The SEC partly won the case last summer when the judge ruled that XRP sold to institutions did meet the legal definition of a security. But the agency was also dealt a huge partial defeat as the judge at the same time ruled that sales of XRP on public exchanges did not meet the legal threshold.

A subsequent request by the SEC to appeal that latter ruling, pronto, even as the remedies phase still played out, was quickly quashed.

Now the judge will weigh the agency's request for penalties.

After the SEC asked the judge for a painfully stiff financial punishment, the Ripple legal team responded by asking the court to impose a penalty more in the vicinity of $10 million; the company says it never acted with recklessness when it came to those institutional sales, and that it did not violate any rules since then, and also that it has cooperated with the SEC.

In its final reply to the Ripple response to the SEC’s penalty imposition motion, the SEC challenged Ripple’s assertion that it wasn't reckless, Cointelegraph said.

Per U.Today, the crypto community eagerly awaits redacted versions of the most recent SEC filing which will shed light on specific points of contention, and their potential implications for XRP.