XRP News Today: Ethical Violations Within the SEC Could Affect Appeal Plans

Bob Mason
Published: Mar 18, 2024, 01:56 GMT+00:00

Key Points:

  • XRP gained 1.66% on Sunday, closing the session at $0.6188.
  • On Monday, updates from the Office of Inspector General investigations into the SEC warrant investor attention.
  • Empower Oversight requests to the FOIA expanded allegations of unethical behavior to include former SEC Chair Jay Clayton also need consideration.
XRP News Today

In this article:

The Sunday Overview

On Sunday, XRP gained 1.66%. Partially reversing a 4.94% slide from the Saturday session, XRP ended the day at $0.6188.

SEC vs. Ripple: SEC Plans to Appeal Hang in the Balance

There was no SEC v Ripple case-related news for investor consideration on Sunday. However, investors will be aware of the amended Court briefing schedule. The SEC must submit its remedy-related opening brief by March 22.

Progress toward a conclusion of the penalty phase dashed hopes of a settlement. A settlement would remove the option for the SEC to appeal the Programmatic Sales of XRP ruling. The plans to appeal against the Programmatic Sales ruling remain an XRP headwind.

However, activity beyond the SEC v Ripple case could affect SEC plans for an appeal.

Office of Inspector General Investigation into Conflicts of Interest

The Office of Inspector General (OIG) is investigating reports of crypto conflicts of interest within the SEC. Non-profit government watchdog Empower Oversight referred the evidence of financial conflicts of interest to the OIG in May 2022.

The investigation involves former SEC Director William Hinman. In a 2021 lawsuit against the SEC, Empower Oversight alleges former SEC officials acted in bias against Ripple Labs and XRP. The government watchdog claims Hinman received millions (USD) from former employer Simpson Thacher.

Hinman helped guide crypto regulations and infamously announced in 2018 that Bitcoin (BTC) and Ethereum (ETH) are not securities. Significantly, Simpson Thacher is part of a group that promotes Enterprise Ethereum.

Before the Programmatic Sales of XRP ruling, the SEC failed to shield the documents under attorney-client privilege on at least six attempts. The documents revealed that Hinman ignored warnings from the SEC Ethics Division and continued to meet with Simpson Thacher.

The direct link between the OIG investigation and the SEC v Ripple case influences SEC plans to appeal against the Programmatic Sale ruling. The SEC may want to avoid exposing any adverse findings from the OIG investigation and scrutiny of the Hinman speech-related documents.

The OIG could release findings from the investigation at any time.

Empower Oversight Intensifies Scrutiny of the SEC

On March 14, Empower Oversight sent a letter to FOIA Officer Raymond McInerney, requesting records regarding possible ethical violations. The letter also raised concerns about former SEC Chair Jay Clayton, stating,

“Additionally, there are potential concerns regarding former SEC Chair Jay Clayton. During his tenor as Chairman, Mr. Clayton publicly stated that Bitcoin is not a security and affirmed Mr. Hinman’s statement that Ether is not a security.”

BTC and ETH saw price spikes in response to the Clayton comments. The SEC filed charges against Ripple Labs on Chair Clayton’s last day at the SEC.

Empower Oversight stated Mr. Clayton joined crypto hedge fund One River Asset Management on leaving the SEC. One River Asset Management reportedly focused on BTC and ETH but not XRP. Former SEC Chair Clayton allegedly had involvement with crypto-related firms while serving as the SEC Chair.

In the letter to the FOIA, Empower Oversight claims,

“In 2022, Mr. Clayton was named as an adviser for Electric Capital, a crypto-focused venture capital firm that was established in 2018, while Mr. Clayton was serving as SEC Chair. Notably, Electric Capital has invested in Consensys, which is a developer of Ether.”

The documents could reveal improper influence over the actions of Hinman and Clayton and efforts of the SEC Ethics division to address possible ethical violations. Importantly, adverse findings could end SEC plans to appeal against the Programmatic Sales of XRP ruling.

XRP Price Action

Weekly Chart sends bullish price signals.
XRPUSD 180324 Weekly Chart

Daily Chart

XRP sat above the 50-day and 200-day EMAs, sending bullish price signals.

An XRP move to the $0.62 handle would give the bulls a run at the $0.6609 resistance level. A breakout from the $0.6609 resistance level could support a move to the $0.70 handle.

Updates from the OIG Investigation and SEC vs. crypto chatter warrant investor consideration.

However, a break below the 50-day EMA could signal a fall to the trend line, the $0.5740 support level, and the 200-day EMA. Buying pressure may intensify at the trend line. The $0.5740 support level and the 200-day EMA are confluent with the trend line.

The 14-day RSI reading, 49.16, suggests an XRP drop below the 200-day EMA before entering oversold territory.

XRP Daily Chart affirms bullish price signals.
XRPUSD 180324 Daily Chart

4-Hourly Chart

On the 4-hourly, XRP sat below the 50-day EMA while holding above the 200-day EMA. The EMAs sent bearish near-term but bullish longer-term price signals.

A breakout from the 50-day EMA would bring the $0.6609 resistance level into play.

However, an XPR fall through the 200-day EMA could give the bears a run at the trend line and the $0.5740 support level. Buying pressure may intensify at the trend line. The $0.5470 support level is confluent with the trend line.

The 4-hourly RSI, with a reading of 40.35, indicates an XRP fall to the $0.5740 support level before entering oversold territory.

XRP 4-Hourly Chart sends bearish price signals.
XRPUSD 180324 4-Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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