Key Takeaways
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Ripple secured a big win in its lawsuit against the SEC this week, legal analysts said.
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A judge ruled that the SEC release documents that may prove it has selectively enforced regulations in the cryptocurrency industry.
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If the SEC now settles, XRP could be in for a big jump.
What Happened?
Ripple, the developer of the XRP blockchain of which XRP is the native token, secured a big win this week in its ongoing lawsuit with the US Securities and Exchange Commission (SEC).
The SEC initiated legal proceedings against Ripple in December 2021 for the alleged sale of unregistered securities, with the SEC claiming that XRP is a security and not a commodity.
The judge presiding over the SEC’s lawsuit against Ripple denied an SEC motion for reconsideration of the deliberate process privilege regarding a set of emails and draft versions of a speech made by then SEC Director William Hinman back in June 2018. In other words, the SEC will now have to release these emails and the draft versions of the 2018 speech.
Why does this matter?
Earlier in the month, nonprofit organisation Empowerment Oversight publicised a separate set of internal SEC emails (acquired via a freedom of information act) that contained evidence of improper conduct by SEC officials involved in the Ripple lawsuit and expose a conflict of interest.
In the emails released by Empowerment Oversight, former SEC Director William Hinman is warned about a potential conflict of interest with the lawsuit against Ripple, given his previous employer Simpson Thacher is an organisation that has worked to promote ethereum.
Empowerment Oversight said the yet-to-be-released emails/draft versions relating to Hinman’s 2018 speech may demonstrate that the SEC was selectively enforcing regulations in the cryptocurrency industry. Moreover, they may prove that Hinman knowingly had a conflict of interest when the lawsuit against Ripple was initiated.
One defense lawyer familiar with the case said that judges decision marked a “very big win for Ripple”. The SEC will now have 14 days (from 11 April) to file an objection to the ruling.
Prior to the ruling that the SEC would have to turn over these documents, John Deaton, a defense attorney representing 65,000 XRP holders on the side of Ripple in the lawsuit, said that he did not think the SEC would not turn over these documents.
“If we get a ruling that they (the emails/draft version of the speech) must be turned over, I believe the case settles w/in 60-90 days from that decision (or possibly sooner),” he said.
XRP Yet To Rally
Even though it looks as though the tide has turned in favour of Ripple in its ongoing lawsuit with the SEC and the SEC may soon opt to settle, XRP is yet to show significant signs of life.
Indeed, XRP/USD has been under pressure in recent weeks, falling back 20% from March highs above 0.90 to current levels in the low 0.70s, in tandem with a broader pullback in cryptocurrency markets.
But this could be an opportunity for the bulls. Some crypto analysts have argued that XRP could be in store for a massive rally if the SEC does settle its case against Ripple in the coming weeks/months.
Bulls would likely look for XRP to break out to fresh year-to-date highs, perhaps above the $1.0 level, which could open the door to a run towards H2 2021 highs in the upper $1.30s/$1.40 area.
Further gains would be difficult in the absence of a broader improvement in crypto market sentiment, which doesn’t seem too likely just yet with inflation in the US and other major economies still elevated, suggesting large central bank rate hikes ahead.
This article was originally posted on FX Empire
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