The Daily: XRP surges after Ripple's SEC case nears end, BTC's institutional investor rebound, WazirX to undo trades following freeze

Happy Thursday! In today's Daily, we take a look at Ripple's $125 million fine, JPMorgan says the bitcoin rebound is primarily supported by institutional investors, Franklin Templeton's tokenized fund comes to Arbitrum and more.

 

Meanwhile, a U.S. judge approved a $12.7 billion settlement between FTX and the CFTC, bringing the 20-month-long lawsuit to an end.

 

Let's get started.

• The SEC accused Ripple in 2020 of raising $1.3 billion through the sale of XRP, which it says is an unregistered security.
• "The SEC's motion for remedies and the entry of final judgment is granted in part and denied in part," the filing signed by Judge Analisa Torres of New York stated. "The Court shall enter a final judgment enjoining Ripple from further violations of the securities laws and imposing a civil penalty of $125,035,150."
• In July 2023, Judge Torres ruled that some of Ripple's sales of XRP, called programmatic, did not violate securities laws because of a blind bid process in place for them. She did, however, rule that other direct sales of XRP to institutional investors were investment contracts and thus constituted unregistered securities sales.
• Ripple's fine is significantly lower than the SEC's proposed $2 billion penalty, while Ripple had argued it should be closer to $10 million.
• "The SEC asked for $2 billion, and the court reduced their demand by ~94%, recognizing that they had overplayed their hand," Ripple CEO Brad Garlinghouse said following the ruling.
• "The court also addressed 'the egregiousness of Ripple’s conduct' and noted that 'there is no question that the recurrent, highly lucrative violation of Section 5 is a serious offense,'" a spokesperson for the SEC told The Block.
• XRP surged more than 25% immediately following the news to around $0.63 before correcting slightly, according to The Block's XRP Price Page.

Bitcoin's institutional investor rebound

• JPMorgan's futures position indicator, which tracks cumulative open interest in CME bitcoin futures contracts, along with the positive slope of the futures curve, suggests a bullish outlook among these investors, the analysts said.
• Optimism from institutional investors is also bolstered by factors such as Morgan Stanley allowing its wealth advisors to recommend Bitcoin ETFs, major liquidations from Mt. Gox and Genesis bankruptcies likely behind us and U.S. political parties signaling support for more favorable crypto regulations, they added.
• Despite the rebound, JPMorgan analysts remain cautious about the crypto market overall due to ongoing equity market vulnerabilities and positive catalysts largely factored in.

Franklin Templeton's tokenized fund expands to Arbitrum

• Investors can gain exposure to the underlying FOBXX asset via Franklin Templeton's blockchain-integrated Benji Investments platform and BENJI token, with the fund already available on Stellar and Polygon.
• The expansion aims to enhance the integration of traditional finance with DeFi, leveraging Arbitrum's position as the largest Ethereum Layer 2 network by total value locked.
• FOBXX was the first U.S.-registered fund to use a public blockchain, introduced in 2021, with Franklin initially leading the now $1.8 billion tokenized U.S. Treasurys niche.
• However, FOBXX was overtaken by BlackRock's new BUIDL fund in April, with its $519 million in assets under management representing a 28.4% market share compared to Franklin's 22% ($402 million).

WazirX to undo all trades following $230 million hack-related withdrawal freeze

Indian crypto exchange WazirX plans to undo all trades following its July 18 withdrawal freeze due to a hack.

Kamala Harris' odds of winning the U.S. presidential election have risen to 49% on Polymarket from 44% last week, now tying with the vocally pro-crypto Donald Trump.