Regulators take aim

Authorities in the U.S. are not done taking dead aim at crypto. Squarely in their crosshairs at the moment are a dominant distributed ledger company and also one of the world's largest crypto exchanges.

On Tuesday, Manhattan prosecutors charged KuCoin with violating anti-money laundering (AML) laws. A pair of KuCoin founders, Chun Gan and Ke Tang, have been charged with conspiracy. The two remain at large (Reuters).

According to CoinMarketCap, KuCoin boasts daily trading volume of more than $2 billion, making it one of the biggest-by-volume exchanges on the planet. It's based in the Seychelles, an archipelago in the Indian Ocean off the coast of East Africa. In addition to rare animals, rainforests and coral reefs, the Seychelles boasts a flourishing digital asset industry – about one-fifth of the world's crypto exchanges are based there – and a regulatory regime that has been trying in recent months to tighten know-your-customer (KYC) rules.

Yesterday's news led to $278 million worth of stablecoin assets leaving KuCoin. It's the exchange's biggest outflow in one day since the November 2022 collapse of FTX, according to CryptoQuant.

Separately, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil lawsuit against KuCoin alleging it failed to register.

KuCoin said on X that its lawyers are looking into the allegations. And the exchange stressed customer assets are safe.

"KuCoin respect the laws and regulations of various countries and strictly adheres to compliance standards," the exchange said.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) has asked a judge to impose $1.95 billion in financial penalties against Ripple Labs, the company associated with XRP. This case stretches back to late 2020 when the SEC filed suit against Ripple and its executives, alleging securities laws violations.

In July of 2023, a judge ruled that the sale of XRP on exchanges did not violate U.S. law. But the judge at the same time, splitting the baby, ruled Ripple’s institutional sales of XRP were unlawful. A jury trial to decide remedies in the matter is set for late April. The SEC’s motion for judgment and remedies was filed on Friday, CoinDesk said.

Stuart Alderoty, Ripple’s chief legal officer, said the documents were set to be made public yesterday.

"Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large," Alderoty said in a post on X. "We trust the court will approach the remedies phase fairly."

Early Wednesday morning, XRP fell 4% to $0.61. Only a couple of days ago, it was $0.65. At last check it was $0.62.

The seventh-largest crypto remains +4.6% over the past week.

One month ago, XRP was struggling to stay above $0.50. Then, suddenly, on March 11, "bulls staged a surprise breakout," said Crypto News, pointing to a parabolic surge (+18.5% in a day) that brought a near-term peak of $0.74.

One week later, XRP was back below $0.60 amidst a wave of profit-taking.

XRP traders would seem to be bracing for a bounce, if recent trends in the derivatives markets are to be trusted.

Open interest in XRP futures crossed $1 billion yesterday. That’s the highest level since March 14, which was a feverish day for crypto at large, as Bitcoin reached a record level of roughly $73,700.

An increase in open interest at a time when an asset’s price is in decline often can be read as a sign of widespread anticipation of a new leg up.

XRP holding steadfastly at $0.62 today comes in the face of: fresh headwinds connected with Ripple's legal battle with the SEC; and a wall of technical resistance. And there is yet another factor weighing on the situation.

We’re talking about the departure from the XRP ecosystem of Dev Null Productions, the company behind Ledger City, a project that enables crypto investors to visualize their holdings via the metaverse.

Dev Null criticized Ripple's leadership for policies relating to selling XRP in large batches, viewed by Dev Null as detrimental to the wider community of smaller holders. The contentious kiss-off prompted Ripple's CTO, David Schwartz, to publicly point out some harsh realities when it comes to holding versus selling, particularly when considering steep state and federal tax rates, which in turn set off a wider discussion about digital financial planning (Coinspeaker).

Forward-looking investors who may be growing impatient about XRP's inability to revisit its recent high (of $0.79, this past July) might want to check out an extremely bullish social media post from Mikybull, a pseudonymous crypto analyst wielding a chart showing how XRP had not only completed its retest but that it's ready "for an explosive upward move."

Mikybull sees the $1 mark being reached, at a minimum, while trumpeting an upper price target of $6. That would represent an 800% gain.

XRP's all-time high of $3.40 came in January of 2018.