XRP News Today: Will SEC Conflicts Investigation Impact Ripple Case Outcome?

Can an investigation into crypto conflicts of interest within the SEC end its plans for an appeal?

SEC vs. Ripple Case: Remedies Related Verdict Pending

On Tuesday, July 9, XRP advanced by 0.97%. Following a 2.76% gain on Monday, July 8, XRP ended the day at $0.4355.

There were no SEC vs. Ripple case-related updates. Investors awaited a court verdict on the penalty Ripple must pay for breaching US securities laws. In July 2023, Judge Analisa Torres ruled that Ripple sold unregistered XRP to institutional investors.

The penalty could range from between $10 million to $2 billion. Judge Torres may also prohibit the sale of XRP to US institutional investors. The ruling could hinge on how Judge Torres views Ripple’s post-complaint conduct. Judge Torres could prohibit XRP sales to US institutional investors if she deems Ripple continued to breach US securities laws after the December 2020 complaint.

However, the findings of an ongoing investigation into crypto conflicts of interest within the SEC could influence the outcome.

Will an Inspector General Investigation Find Conflicts of Interest?

In February 2024, Empower Oversight highlighted an investigation into possible crypto conflicts of interest in the SEC. The US government watchdog announced that the Office of Inspector General (IG) was close to concluding its investigation.

The conflicts of interest related to former SEC Corporation Finance Director William Hinman. Hinman delivered a speech in 2018, saying that bitcoin (BTC) and ethereum (ETH) were not securities.

Empower oversight alleged Hinman received millions of dollars from his former employer, Simpson Thacher, while at the SEC. Simpson Thacher is part of a group promoting Enterprise Ethereum. After leaving the SEC, Hinman returned to Simson Thacher.

Hinman continued to meet with Simson Thacher while at the SEC despite warnings from the SEC Ethics Division.

If the IG finds the SEC acted unethically, it could be another victory for the US digital asset space. The IG’s findings may incentivize US lawmakers to rein in the SEC and its regulation-through-enforcement stance against digital assets.

The Office of Inspector General could release the results of its investigation at any time.

On Monday, July 9, Amicus Curiae attorney and US Senate candidate for Massachusetts John E. Deaton, raised concerns about SEC practices.

John E Deaton Plans for US Regulators Highlight Conflicts Issue

John E. Deaton talked about regulatory capture, saying,

“I will offer a bill that imposes a 3-5 year statutory bar, preventing regulators (including lawyers) from working in the industry they were just in charge of regulating. […]. You won’t get to leave the SEC and immediately work for a hedge fund. I plan to weld the revolving door existing at our federal agencies permanently shut.”

The reference to members of the SEC leaving for hedge funds resonated.

In March 2024, Empower Oversight sent a FOIA request for records regarding possible ethical violations. The letter targeted William Hinman and former SEC Chair Jay Clayton. Empower Oversight claimed that Jay Clayton publicly said BTC was not a security and supported Hinman’s speech about ETH.

After leaving the SEC, the former SEC Chair allegedly joined crypto hedge fund One River Asset Management. One River Asset Management focused on BTC and ETH but not XRP.

Exposing crypto conflicts of interest within the SEC could end its plans to appeal unfavorable court rulings. Currently, SEC intentions to appeal the Programmatic Sales of XRP ruling remain intact, another XRP headwind.

In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test. XRP could face selling pressure if the SEC files an appeal after the Ripple verdict.

Investors should remain alert with the court verdict pending. Monitor real-time data and expert commentary to adjust your trading strategies accordingly. Stay informed with our latest updates and insights to navigate the crypto market.

XRP Price Action

Daily Chart

XRP sat well below the 50-day and 200-day EMAs, confirming the bearish price trends.

An XRP breakout from the $0.45 handle could signal a rise to the trend lines and the 50-day EMA. A move above the trend lines and the 50-day EMA would give the bulls a run at the 200-day EMA. However, selling pressure could increase at the top trend line. The 50-day EMA is confluent with the top trend line.

SEC vs. Ripple case-related news and SEC activity need consideration on Wednesday.

Conversely, an XRP break below $0.42 may give the bears a run at the $0.40 handle.

With a 14-day RSI reading of 38.49, XRP could break below the $0.40 handle before entering oversold territory.