Ripple-gate: Ripple (XRP) Can Win in Court After a New SEC Scandal

Ripple-gate: Ripple (XRP) Can Win in CourAfter a New SEC Scandal

Source: Adobe Stock

Cryptocurrency XRP has been under pressure for almost a year in regard to the SEC lawsuit. That situation could be changed, however, and XRP could skyrocket after the nonprofit watchdog sued the SEC.

The non-profit organization Empower Oversight suspects the SEC of a conflict of interest with the Californian company Ripple, which had launched XRP cryptocurrency. Empower Oversight oversees the actions of government organizations. It accused the SEC of violating the Freedom of Information Act (FOIA) because the SEC refused to disclose details of its employees’ communications with commercial organizations.

In essence, it comes about the fact that the former SEC Director of the Division of Corporation Finance William Hinman, during his work in the SEC, allegedly got large sums of money from the law firm Simpson Thacher, a member of the Enterprise Ethereum Alliance. Empower Oversight clarifies that the Enterprise Ethereum Alliance is committed to expanding the use of Ethereum in the enterprise segment.

As Director of Corporation Finance in June 2018, Hinman publicly stated that ETH is not a security. After that, the price of ETH soared from about $250 to almost $400. After leaving the SEC, Hinman joined Simpson Thacher as Senior Advisor.

The Empower Oversight lawsuit mentions another SEC employee, Marc Berger, head of the Enforcement Division. It was he who filed a lawsuit against Ripple a year ago. By a strange coincidence, he now also works for Simpson Thacher after he had left SEC.

The same thing happened to former SEC chairman Jay Clayton, who lost his position to Gary Gensler on December 23, 2020, when a lawsuit was filed against Ripple. Clayton admitted in a public speech that bitcoin is not a security, and bitcoin soared fast soon. After leaving the SEC, Clayton joined the newly formed Advisory Board of crypto hedge fund One River Asset Management. The fund holds only bitcoin and Ethereum in the portfolio.

In its lawsuit, Empower Oversight pointed out that eight requests in accordance with FOIA were sent to the SEC. The Commission did not respond to six of them. In two replies, it reported that there were no records of the requested information.

Observers say that Empower Oversight’s lawsuit may initiate one of the most high-profile corruption scandals in the field of cryptocurrency regulation. “Ripple-gate” can dramatically change the cryptocurrency market and the relationship between regulators and market participants. Due to this case, bitcoin and Ethereum crashed by 10% and 15%, respectively. However, XRP did not rise and also collapsed along with the market by 5%.