🥊 SEC takes another Ripple blow

Talking points

👀 Quick market outlook

Well, well, well... The markets have finally had some movement again and we even saw above $28k again. But, we aren't there just yet and we still have a big way to go before we reach those big green candles.

Here's some insight to digest 👇

It seems the markets could be moving up at some point but we are likely to see a pullback to around $25K before that occurs. But as always, nothing is guaranteed, so make sure to have a plan and stick to it during these interesting times.

🥊 SEC takes another Ripple blow

In a significant development in the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple, a U.S. federal judge has dismissed the SEC's attempt to appeal its previous setback against the blockchain company. Ripple's native cryptocurrency, XRP , experienced a notable price surge of approximately 5% in response to the news.

District Judge Analisa Torres delivered the verdict, stating that the SEC had failed to meet the legal criteria necessary to demonstrate the presence of controlling legal questions or substantial grounds for differences of opinion. While this particular ruling marked a setback for the SEC, it is not a complete loss for the regulatory agency.

Judge Torres, in her decision, announced that a trial date has been set for April 2024 to address other unresolved issues in the case. This means that certain aspects of the legal dispute will proceed to trial. Following the conclusion of this trial, the SEC retains the option to pursue a broader appeal encompassing the entire case.

The legal battle between the SEC and Ripple centers on the classification of XRP as a security, with the SEC alleging that Ripple conducted an unregistered securities offering by selling XRP tokens. Ripple, on the other hand, has vehemently denied these allegations and argued that XRP is a digital currency, distinct from securities.

The lawsuit has been closely watched in the cryptocurrency industry as it carries significant implications for the regulatory treatment of digital assets. A favorable outcome for Ripple could potentially set a precedent in favor of other blockchain projects facing similar SEC scrutiny.

This recent development follows a notable victory for Ripple earlier in the litigation process. In August, Judge Torres granted Ripple's motion to compel the SEC to produce internal documents related to the agency's determination of whether Bitcoin and Ethereum are considered securities. Ripple argued that this information was crucial to its defense, as it could help establish inconsistent regulatory practices by the SEC regarding cryptocurrencies.

As the legal battle continues to unfold, it remains a pivotal case that could shape the regulatory landscape for digital assets in the United States. Ripple's legal victory in this particular instance has injected further uncertainty into the outcome of the lawsuit, leaving both sides with significant stakes as they prepare for the April 2024 trial.

❌ Ledger makes cuts to staff

Pascal Gauthier, the CEO and chair of Ledger, a prominent hardware crypto wallet manufacturer, has revealed plans to downsize the company's workforce by approximately 12%.

In an official blog post published on October 5, Gauthier cited the challenging market conditions in the wake of the 2022 bear market and the recent struggles of industry players like FTX and Voyager Digital as driving factors behind the decision.

As per data available on LinkedIn, Ledger employed around 734 individuals at the time of the announcement. This reduction in workforce could potentially impact around 88 employees.

Gauthier explained the necessity of these measures by pointing to the macroeconomic challenges that have been impacting the company's revenue-generation capabilities. In his statement, he said, "Macroeconomic headwinds are limiting our ability to generate revenue, and in response to the current market conditions and business realities, we must reduce roles across the global business. Sadly, this means we are making the difficult decision to reduce 12% of the roles at Ledger."

The announcement comes approximately seven months after Ledger successfully raised over $109 million in a funding round, elevating the company's valuation to $1.4 billion. Ledger's strategic moves have included integrating its Live software with PayPal in August, allowing verified U.S. residents to purchase cryptocurrencies through the payment app.

Ledger's decision to reduce its workforce aligns with a broader trend seen in the cryptocurrency industry, where several companies have announced staff cuts in response to market volatility and evolving regulatory dynamics, particularly in the United States.

In September, Binance(.)US saw its CEO, Brian Shroder, depart as part of a restructuring process that involved the elimination of approximately 100 positions. Additionally, companies like Nansen, Coinbase, Huobi, and Crypto(.)com have also confirmed plans for layoffs in 2023.

Uh oh...

The cryptocurrency industry's ongoing adaptability to market shifts and regulatory changes underscores the challenges faced by companies as they navigate the complex landscape of the digital asset space.

Ledger's decision to proactively address these challenges by streamlining its operations reflects the broader resilience and agility that have come to define the industry.

📉 Crypto VC funding drops to 3-year low

The cryptocurrency industry is witnessing a significant decline in startup funding, with investment levels reverting to those seen in the fourth quarter of 2020, amidst the ongoing bear market.

Reports indicate that crypto startups managed to secure a total of $2.1 billion in funding across 297 deals during the third quarter of 2023. This represents a sharp 36% drop from the previous quarter and a staggering 70% decline from the same period in 2022.

Seed funding emerged as the dominant category for fundraising, with early-stage projects collecting $488 million through 98 deals. Researchers noted a noticeable trend of shifting focus away from later-stage projects, with less than 1.4% of deals involving Series B or later stages.

Source: Messari

Conversely, strategic financing rounds have experienced a notable surge, rising from a mere 0.2% share of total deals in the fourth quarter of 2021 to more than 22% in the third quarter of 2023. The largest private equity round during this period was a substantial $200 million investment into Islamic Coin, a United Arab Emirates-based company, courtesy of Alpha Blue Ocean’s ABO Digital.

This funding landscape reflects the challenging environment faced by crypto startups amid the current market downturn. As investors recalibrate their strategies, the industry is witnessing a notable shift towards early-stage projects and strategic financing, underscoring the need for adaptability in the face of volatile market conditions.

It’s not entirely surprising that investments have dropped, especially with the markets being in a bad place, but this fuels the excitement for when things change and we start to see a rally up. Either way, like most instances, it is a waiting game to see what happens next.

This article is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.