XRP Lawsuit Update: Forecast and Prospects

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Introduction about XRP Lawsuit

The lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC) has created significant turmoil in the cryptocurrency market. The XRP lawsuit began in 2020 when the SEC accused Ripple of violating U.S. securities laws by selling XRP to the public without registration. Ripple refuted the allegations, asserting that XRP is not a security.

Throughout the XRP lawsuit process, the value of XRP has witnessed substantial declines at times, but also surged following positive developments in the case. Ripple is also considering conducting an initial public offering (IPO) outside the United States and plans to launch an exchange-traded fund (ETF) based on XRP.

XRP lawsuit not only affects Ripple and XRP but also establishes important legal precedents for the cryptocurrency industry as a whole.

SEC vs XRP Lawsuit Update: Investors Anticipate OIG Findings

On Saturday, investors remained on standby for updates regarding the SEC vs. Ripple case. With Ripple and the SEC progressing toward filing remedy-related briefs, traders continued to cash out profits at the $0.63 mark. The upcoming arguments between the SEC and Ripple will revolve around the issue of punitive disgorgement for the sale of unregistered XRP securities to US institutional investors.

Notably, hopes for a settlement have dimmed, with the SEC required to submit its remedy-related brief by March 22, followed by Ripple’s deadline on April 22.

However, the ongoing Office of Inspector General (OIG) investigation into crypto conflicts of interest within the SEC could sway sentiment in the SEC vs. Ripple case. Former SEC Director William Hinman is under scrutiny in this investigation. Hinman gained notoriety in 2018 for stating that bitcoin (BTC) and ether (ETH) are not securities, affecting XRP while boosting demand for ETH.

Empower Oversight, a US government watchdog, has alerted the OIG to potential conflicts of interest involving Hinman. Allegations suggest Hinman received substantial payments from his former employer, Simpson Thacher, while serving at the SEC. Simpson Thacher is associated with a group that promotes Enterprise Ethereum. Importantly, Hinman returned to Simpson Thacher after leaving the SEC.

Documents related to Hinman’s speeches, disclosed during the SEC vs. Ripple case, lend credence to these allegations. They revealed that Hinman continued to meet with Simpson Thacher despite warnings from the SEC Ethics Division.

Should the OIG find evidence of inappropriate behavior by the SEC, it could prompt a settlement in the Ripple case and put an end to the SEC’s plans to appeal the ruling on Programmatic Sales of XRP.

In July 2023, Judge Torres ruled that programmatic sales of XRP did not meet the third prong of the Howey Test. XRP experienced a surge to a high of $0.9327 in 2023 following the ruling. However, speculation about the SEC’s intention to appeal the ruling caused XRP to drop below $0.50.

A settlement would likely trigger a positive response from XRP.

While investors await the OIG investigation findings, a court ruling in the SEC vs. Coinbase case could also have significant ramifications.

SEC vs Coinbase: Pending Motion to Dismiss Ruling

In August 2023, Coinbase filed a Motion to Dismiss (MTD) all SEC charges against the company, arguing that the SEC lacked the statutory authority to regulate crypto exchanges.

Judge Katherine Failla heard oral arguments in January 2024. Legal experts believe Coinbase provided a stronger definition of an investment contract. With almost three months having passed since the court hearing, a ruling is expected soon.

Amicus Curiae attorney and US Senate candidate in Massachusetts, John E Deaton, shared his perspective on the MTD. Deaton believes that if the court grants Coinbase’s MTD, the SEC may settle the case against Ripple.

A settlement could have far-reaching implications. Notably, a victory for Coinbase and a settlement in the Ripple case could pave the way for XRP-spot ETF applications. The SEC is unlikely to approve such applications if it plans to appeal the ruling on Programmatic Sales.