One prong is the expectation of profit. Investors expect financial gains from an investment stemming from company performance. Ripple argued that the ODL contracts explicitly prevent profits, suggesting post-complaint compliance with US securities laws.
As investors awaited the heavily anticipated court ruling, the SEC faced more backlash from the US courts.
Will the Latest Court Ruling Influence SEC Appeal Plans?
On Thursday, June 27, Ripple Chief Legal Officer Stuart Alderoty shared the latest court ruling that targeted the SEC, saying,
“Another court slams the SEC. This time for unlawfully rescinding a rule on proxy advisory firms without adhering to the Administrative Procedure Act. The court explains that Gensler personally directed this illegal move.”
While the case did not involve a crypto firm, it highlighted current court sentiment toward the SEC.
Alderoty shared the court order that discussed the consideration of a 2020 Rule and direction from newly appointed SEC Chair Gary Gensler to reconsider the Rule.
Things could get worse for SEC Chair Gary Gensler. The Office of Inspector General (IG) is nearing a conclusion to its investigation of alleged crypto conflicts of interest within the SEC.
Investigation into the SEC Involves Former Director William Hinman
In February, US Government Watchdog Empower Oversight announced the status of the IG investigation. The allegations of conflicts of interest related to former SEC Director William Hinman. Hinman was a central figure in the SEC vs. Ripple case.
Empower Oversight sued the SEC in 2021, alleging that former SEC officials acted biasedly against XRP and Ripple. Empower Oversight claimed that William Hinman received millions of dollars from his former employer, Simpson Thacher, part of a group promoting Enterprise Ethereum.
Hinman publicly announced that bitcoin (BTC) and ethereum (ETH) were not securities in 2018. Hinman returned to Simpson Thacher after leaving the SEC.
Significantly, the US courts ordered the SEC to disclose internal communications involving Hinman to Ripple in 2023. The internal documents revealed that Hinman continued to meet with Simpson Thacher despite warnings from the SEC Ethics Division.
An adverse outcome to the IG investigation could force the SEC to end plans to appeal against the Programmatic Sales of XRP ruling. Investors would likely embrace such an outcome, with XRP likely to retake the $1.00 handle.
XRP Price Action
Credit: Source link