Ripple Lawsuit Victory Looms After Big Win Versus SEC

According to legal commentators, Ripple won a significant victory in its case against the SEC this week.

A court ordered the SEC to reveal records that might show it has selectively enforced cryptocurrency restrictions.

If the SEC finally settles, XRP might see a significant increase.

What went wrong?

Ripple, the creator of the XRP blockchain, whose native token is XRP, has won a significant victory in its continuing legal battle with the US Securities and Exchange Commission (SEC).

In December 2021, the SEC filed a lawsuit against Ripple for allegedly selling unregistered securities, arguing that XRP is a security rather than a commodity.

The SEC's application for reconsideration of the deliberative process privilege surrounding a collection of emails and draft versions of a speech given by then-SEC Director William Hinman in June 2018 was refused by the court presiding over the SEC's action against Ripple. To put it another way, the SEC will now be required to share these communications as well as draft copies of the 2018 address.

What is the significance of this?

Earlier this month, the organization Empowerment Oversight made public a different collection of internal SEC emails (obtained via a freedom of information act request) that showed evidence of unlawful behavior by SEC employees engaged in the Ripple litigation and revealed a conflict of interest.

Former SEC Director William Hinman is informed in emails disclosed by Empowerment Oversight about a possible conflict of interest with the Ripple litigation since his prior company, Simpson Thacher, had sought to promote ethereum.

The yet-to-be-released emails/draft versions connected to Hinman's 2018 speech, according to Empowerment Oversight, may show that the SEC was selectively enforcing restrictions in the cryptocurrency business. They might also show that Hinman was aware of a conflict of interest when the case against Ripple was filed.

According to one defense attorney acquainted with the case, the judge's decision was a "pretty major success for Ripple." The SEC now has 14 days (starting April 11) to submit an objection to the decision.

Prior to the finding that the SEC must give over these information, John Deaton, a defense attorney representing 65,000 XRP holders on Ripple's side in the litigation, said that he did not believe the SEC would refuse to do so.

"I anticipate the lawsuit closes in 60-90 days from that judgment (or potentially sooner) if we receive a determination that they (the emails/draft version of the speech) must be given over," he added.

XRP Is Still Waiting To Rally

XRP has failed to show major signs of life, despite the fact that the tide seems to be turning in Ripple's favor in its continuing litigation with the SEC, and the SEC may soon elect to settle.

Indeed, XRP/USD has been under pressure in recent weeks, sliding 20% from March highs over 0.90 to current lows in the low 0.70s, coinciding with a larger sell-off in cryptocurrency markets.

However, the bulls may be able to take advantage of this situation. Some crypto specialists believe that if the SEC settles its lawsuit against Ripple in the future weeks/months, XRP might see a big rise.

Bulls are expecting XRP to break out to new year-to-date highs, maybe over $1.0, which could pave the way for a run to H2 2021 highs in the mid $1.30s/$1.40 range.

Further increases would be difficult to achieve in the absence of a wider recovery in crypto market sentiment, which does not seem to be imminent given the high level of inflation in the US and other major nations, implying substantial central bank rate rises ahead.