XRP News Today: SEC vs. Debt Box Ruling Sours SEC’s XRP Appeal Prospects

The Monday Overview

On Monday, XRP rallied 4.23%. Following a 1.66% gain on Sunday, XRP ended the day at $0.6450. Significantly, XRP bucked the broader market trend. The total crypto market cap declined by 1.95% to $2,463 billion.

SEC v Debt Box Ruling to Test SEC Appetite to Appeal XRP Ruling

On Monday, XRP reversed losses from earlier in the session as investors reacted to SEC v Debt Box case-related updates. Judge Robert J. Shelby denied the SEC Motion to Dismiss the case against Debt Box. According to the court ruling,

“[…] the court concludes the Commission (SEC) engaged in bad faith conduct in seeking, obtaining, and defending the ex parte TRO, asset freeze, and appointment of a receiver. The court imposes sanctions under its inherent authority for the Commission’s abuse of judicial process. The Commission is ORDERED to pay Defendants’ and Receiver’s attorneys’ fees and legal costs arising from the TRO and the Receiver.”

The SEC filed a Motion to Dismiss in January, responding to a December court order. In December, Judge Shelby ordered the SEC to show cause why the court should sanction the SEC for making false and misleading representation to the courts.

The court ruling comes at a difficult time for the SEC, which faces increasing scrutiny over conflicts of interest leading to the SEC v Ripple case. Significantly, the court order could raise doubts about SEC plans to appeal the Programmatic Sales of XRP ruling. In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP do not satisfy the third prong of the Howey Test.

Empower Oversight Puts the Spotlight on the SEC and the Ripple Case

Last week, Empower Oversight, a non-profit US Government watchdog, filed a request to the FOIA. Empower Oversight requested records to investigate possible ethical violations within the SEC.

The letter to the FOIA highlighted relationships between former SEC Chair Jay Clayton and crypto firms One River Asset Management, Electric Capital, and Consensys.

• Hedge Fund One River Asset Management focused entirely on BTC and ETH.
• Electric Capital invested in Consensys, a developer of Ether.

Empower Oversight claimed former Chair Clayton publicly said BTC is not a security and affirmed Hinman’s categorization of ethereum. The SEC filed charges against Ripple Labs on Chair Clayton’s last day at the SEC. Empower Oversight alleges Mr. Clayton joined One River Asset Management upon leaving the SEC.

Former SEC Director William Hinman remained a focal point. In 2018, Hinman said BTC and ETH are not securities. Empower Oversight filed charges against the SEC in 2021, alleging former SEC officials were biased against Ripple Labs and XRP. The government watchdog claimed former employer Simpson Thacher paid Hinman millions (USD) while working at the SEC.

After leaving the SEC, Hinman returned to Simpson Thacher and became an adviser at Andreessen Horowitz.

• Simpson Thacher is part of a group that promotes Enterprise Ethereum.
• Andreessen Horowitz: Hedge fund advocating Hinman statements on the classification of ETH.

Court documents from the SEC v Ripple case substantiate the allegations. Hinman speech-related documents revealed Hinman continued meeting with Simpson Thacher despite warnings from the SEC Ethics Division.

Since filing the charges against Ripple, the SEC has failed to shield the Hinman speech-related documents under attorney-client privilege on at least six attempts.

The increasing scrutiny of SEC officials and linkages with pro-BTC and ETH crypto firms will raise eyebrows.

Office of Inspector General Investigation in the Spotlight

The Office of Inspector General (OIG) is investigating reports of crypto conflicts of interest within the SEC. Empower Oversight provided the OIG with evidence of financial conflicts of interest in May 2022.

Findings of financial conflicts of interest could further pressure the SEC to end plans to appeal the Programmatic Sales ruling.

SEC plans to appeal against the Programmatic Sales ruling remain an XRP headwind.

The OIG could release its findings at any time, which could incentivize US lawmakers to address SEC oversight of the US crypto market.

XRP Price Action

Daily Chart

XRP hovered the 50-day and 200-day EMAs, affirming the bullish price signals.

An XRP break above the $0.6609 resistance level could signal a move toward the $0.7467 resistance level.

Investigations into conflicts of interest within the SEC and SEC v Crypto news warrant investor attention.

However, a drop below the 50-day EMA could give the bears a run at the trend line, the $0.5740 support level, and the 200-day EMA. Buying pressure could 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, 50.66, indicates an XRP return to the $0.70 before entering overbought territory.

4-Hourly Chart

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

A break above the 50-day EMA would support an XRP move to the $0.6609 resistance level.

However, an XPR drop below the 200-day EMA could signal a fall to the trend line and the $0.5740 support level. Buying pressure could intensify at the trend line. The $0.5470 support level is confluent with the trend line.

The 4-hourly RSI, with a reading of 46.90, suggests an XRP drop to the $0.5740 support level before entering oversold territory.