Insider Trading on SEC v. Ripple lawsuit news?

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Dark Passenger
Feb 20, 2021

One of the largest crypto stories of the year is the SEC filing a lawsuit against Ripple Labs on December 22, 2020. This has obviously affected the outlook and price of the XRP digital asset. However, there is another story hidden within this data. One that may show that insiders had knowledge of the lawsuit prior to the announcement to the public.


Think of the major events in the past year that would change the sentiment surrounding XRP. The first, the announcement of the pandemic, and secondly, the announcement of SEC lawsuit against Ripple. The BitMEX perpetual contract funding rate is a great metric for measuring changes in sentiment. A downward spike in the BitMEX perpetual funding rate indicates a negative outlook on the asset, while an upward spike shows positive sentiment for the future.



XRP over the past year. BitMEX Perpetual Contract Funding Rate shown in brown. 1) March 12, 2020 2) December 24, 2020 3) December 12, 2020.


Now, let's look at the data. Three major downward spikes are labeled by 1, 2, and 3.


1: The number 1 indicates March 12, 2020. This is the day when the WHO declared the COVID-19 outbreak a pandemic. Additionally, Trump suspended travel from Europe to the United States. It makes sense that the perpetual contracts for XRP would also have negative outlook on the asset.


2: The number 2 indicates the announcement of the SEC lawsuit against Ripple. Although, not as large of a negative spike as March 12, still a significant change in sentiment surrounding XRP. This downward spike also makes sense.


3: The number 3 indicates December 12, 2020. Here lies the mystery. Up until this point XRP was making a climb off of lows that had lasted several years. All of a sudden sentiment changed, prices dropped, and the perpetual contract funding rate hit the lowest level possible (-0.75%). This doesn't make sense.


The BitMEX perpetual contract funding rate drop on December 12, 2020 for XRP could be a coincidence. This would include many investors (all on the same day) decide to change to a negative outlook on XRP. It seems peculiar that this large negative spike occurred at the onset of a bull run a little less than two weeks prior to the lawsuit announcement. No other major coin saw the same negative spike on December 12, 2020.


In my opinion, I believe some group of people had prior knowledge of the SEC lawsuit against Ripple and they made some trades on this knowledge.



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Dark Passenger
Feb 20, 2021

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