XRP News: SEC’s Troubles Deepen – Ripple Lawsuit and Bill Hinman

Key Insights:

• XRP slid by 5.66% on Thursday, ending the session at $0.6118.
• Broad-based crypto market sell-off left XRP at sub-$0.62.
• Ripple Chief Legal Officer targets SEC Chair Gary Gensler and the Bill Hinman speech.

The Thursday Overview

On Thursday, XRP slid by 5.66%. After a 3.03% gain on Wednesday, XRP ended the day at $0.6118.

Broad-based Crypto Sell-Off Sends XRP Below $0.62

On Thursday, there was no court activity in the SEC v Ripple case to influence buyer demand for XRP. The lack of court activity left XRP at the mercy of the SEC and the broader crypto market.

Investors turned bearish as the SEC’s window of opportunity to approve 12 BTC-spot ETFs narrowed further.

Bitcoin (BTC) and ethereum (ETH) ended the Thursday session with losses of 4.47% and 4.80%, respectively. The total crypto market cap declined by 4.07% to $1,352 billion.

The approval window for the 12 BTC-spot ETFs closes on November 17. Investors must then wait until January for the SEC to have an opportunity to batch approve the applications.

Ripple Chief Legal Officer Targets SEC Chair Gary Gensler

The remedies-related discovery part of the SEC v Ripple case commenced on Monday. Judge Analisa Torres gave the SEC and Ripple until February 12, 2024, to conclude remedies-related discovery.

Until February, the crypto community will likely speculate about the likely penalty Ripple must pay for XRP sales to institutional clients. With the parties entering the final stage of the case, the SEC and SEC Chair Gary Gensler could face increased scrutiny.

Judge Analisa Torres decides the penalty amount. Intense scrutiny of SEC methods may draw the interest of Judge Torres and others involved in crypto cases.

On Thursday, Ripple Chief Legal Officer Stuart Alderoty reacted to SEC Chair Gary Gensler post on X (formerly Twitter).

Speaking at the 2023 Securities Enforcement Forum, Gensler quoted a speech from the first SEC Chair, Joseph Kennedy, saying,

“We are not prosecutors of honest business nor defenders of crookedness. We are partners of honest business & prosecutors of dishonesty. We shall not prejudge, but we shall investigate.”

Alderoty had this to say about the Gensler reference to the Kennedy speech,

“Fact check Gensler’s recent remarks. Ripple was sued but never charged with “dishonesty.” The failed case against it was prejudged, beginning with the ethically compromised Bill Hinman. Gensler has prejudged crypto and has filed suit against others w/o investigation.”

The reference to Bill Hinman was poignant.

Bill Hinman: The Thorn in the SEC’s Side

In 2018, Bill Hinman said BTC and ETH are not securities. While seemingly innocuous, Hinman previously worked for Simpson Thacher, a law firm that forms part of a group promoting Enterprise Ethereum. While an SEC Director of the Division of Corporation Finance, documents show Hinman meeting with his former employer despite the SEC ethics team advising otherwise.

The famous Hinman speech-related documents became a focal point in the SEC v Ripple case. The SEC made at least six attempts to shield the speech-related documents under attorney-client privilege. However, the court denied the SEC motions and forced the SEC to disclose the documents to Ripple.

If the SEC desires to shield the documents from public scrutiny, the documents could have a significant bearing on the case.

Ripple is not alone in recognizing the relevance of the Hinman speech and associated documents.

In 2021, US government watchdog Empower Oversight sued the SEC, alleging that former SEC officials were biased against Ripple Lab and XRP.

The continued focus on Bill Hinman may be a concern for the SEC. In court discussions about Bill Hinman and his association with Simpson Thacher and Enterprise Ethereum could draw more Federal Judge condemnation. Two US Federal Judges called the SEC arbitrary and capricious in recent cases.

XRP Price Action

Daily Chart

XRP held above the 50-day and 200-day EMAs, affirming bullish price signals.

An XRP break above the $0.6354 resistance level would support a move to $0.65. A break above $0.65 would give the bulls a run at the $0.7047 resistance level.

SEC v Ripple case-related chatter and broader crypto market trends will likely influence buyer demand.

An XRP drop below the trend line and 50-day EMA would support a break below the $0.5835 support level. Buying pressure will likely intensify at $0.5880. The 50-day EMA is confluent with the trend line.

The 14-day RSI reading of 50.67 indicates an XRP return to $0.65 before entering overbought territory.

4-Hourly Chart

In the 4-hourly Chart, XRP sits below the 50-day EMA while remaining above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

An XRP break above the $0.6354 resistance level would support a move to the 50-day EMA and $0.65.

However, a drop below the 200-day EMA would bring sub-$0.60 and the trend line into view.

The 4-hourly RSI, with a reading of 37.94, indicates an XRP drop below the 200-day EMA before entering oversold territory.