Peter Smith
XRP remains under pressure as the SEC is under legal scrutiny for a crypto conflicts of interest probe. The outcome could impact the regulator's appeal in the Ripple case, influencing XRP's price trajectory.
SEC Under Legal Fire—Could It Drop the XRP Appeal?
The U.S. Securities and Exchange Commission (SEC) is facing mounting legal pressure as a new lawsuit challenges its handling of a crypto-related conflicts of interest probe. On Wednesday, February 5, whistleblower group Empower Oversight filed a lawsuit against the SEC, accusing it of withholding crucial documents related to an internal investigation of former SEC Director William Hinman.
According to Empower Oversight,
"The lawsuit, filed today, seeks to compel the agency to release the report since completed by the SEC Office of Inspector General (SEC OIG). The suit also seeks all associated documents, related to an investigation of William Hinman, former Director of the Division of Corporate Finance at the SEC, and possible conflicts of interest."
The lawsuit claims that the SEC has ignored multiple Freedom of Information Act (FOIA) requests seeking transparency. Fox Business journalist Eleanor Terrett also submitted a FOIA request in December, further pressuring the regulator to disclose findings from the Office of Inspector General (OIG).
How the SEC Probe Could Affect XRP
The OIG investigation centers on allegations that William Hinman received millions in payments from Simpson Thacher, a law firm with ties to Enterprise Ethereum while overseeing crypto regulations at the SEC. In 2018, Hinman publicly stated that Bitcoin (BTC) and Ethereum (ETH) were not securities, which significantly shaped the SEC's regulatory stance.
Court documents from the Ripple case revealed that Hinman continued interacting with Simpson Thacher employees despite warnings from the SEC’s ethics division. These revelations raise concerns about potential conflicts of interest, which could ultimately influence the SEC’s decision on its appeal in the XRP case.
If the OIG findings confirm conflicts of interest, the SEC may be pressured to withdraw its appeal, which could significantly impact XRP’s legal standing and market performance.
XRP Price Struggles Amid SEC Appeal Uncertainty
The legal uncertainty surrounding the SEC’s appeal has weighed heavily on XRP’s price. On Thursday, February 6, XRP dropped by 2.34%, extending its three-day losing streak. This decline followed Wednesday’s 5.8% slide, bringing XRP’s closing price to $2.3260.
XRP underperformed the broader crypto market, which saw a 0.96% decline, bringing the total market cap to $3.09 trillion. The ongoing Ripple case remains a key driver of XRP’s price action, with investors closely monitoring the SEC’s next move.
Analysts suggest that if the SEC withdraws its appeal, XRP could rally past its all-time high of $3.5505. However, if the regulator proceeds with the appeal, XRP risks falling below $1.50.
Conclusion
The SEC’s legal troubles and potential impact on the XRP case add another layer of complexity to the crypto regulatory landscape. Investors are also monitoring broader developments, including discussions around a U.S. Bitcoin reserve, which could influence institutional adoption and overall market sentiment.
With regulatory uncertainty looming, XRP’s price remains highly sensitive to legal updates. Stay tuned for expert analysis on how these developments may shape the future of XRP and the wider crypto market.
Peter Smith
