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XRP Could Catch a Break if a Bias Lawsuit Against the SEC Succeeds

XRP Could Catch a Break if a Bias Lawsuit Against the SEC Succeeds
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A recent lawsuit filed by Enable supervision, a nonprofit government watchdog group, claims that former Securities and Exchange Commission (SEC) officials were biased against it. Ripple Labs (CCC:XRP-USD) and its XRP crypto.

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According to the lawsuit, they had a conflict of interest while advertising digital assets such as XRP crypto as securities. At the same time, they declared that other companies such as Ethereum (ETH) are not securities, based on a conflict of interest.

According to what was reported by the electronic magazine Daily HodelEmpower Oravent issued a press release on December 10, listing the highlights of their allegations and requesting a set of Freedom of Information Act (FOIA) documents on conflicts of interest.

The allegations of the lawsuit are disturbing

The press release made the following allegation about conflicts of interest, which are close to corruption:

William Henman, a former senior official with the Securities and Exchange Commission, received millions of dollars in compensation from his former employer, Simpson Thatcher, while helping to direct the SEC’s regulation of cryptocurrency.

The press release continued that other officials at the agency also have severe conflicts of interest. In addition, it alleges that Mark Berger, the SEC’s law enforcement chief who filed the lawsuit against Ripple Labs, also left the Securities and Exchange Commission for the same law firm.

The Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs in December of 2020, alleging that XRP was issued as unregistered security. The company has since claimed that the Securities and Exchange Commission (SEC) does not have clear rules about which cryptocurrencies are a security and which do not. Bitcoin and Ethereum are both classified as non-security.

For example, the lawsuit says former Securities and Exchange Commission Chairman Jay Clayton may have a conflict of interest. He declared that Bitcoin is not a security, and then joined crypto hedge fund One River Asset Management, which “works only on Bitcoin and Ether.” Many of the other officials mentioned in the press release also ended up working for the companies they had previously regulated.

What this could mean for XRP

So far, the lawsuit does not state the exact rules that may have been violated by regulators if the allegations were true. But one thing is for sure – it doesn’t look good for the agency. Moreover, if true, the judge or public opinion could force the Securities and Exchange Commission to close the case against Ripple Labs.

If that happens, XRP could move significantly higher. One reason is that some banks may be more inclined to use cryptocurrencies if they are less controversial. Ripple Labs wants them to use XRP and its other products to transfer funds.

This has been one of the main criticisms of XRP so far – at least, in the US. However, Ripple Labs notes that the ODL payment system has been widely used abroad.

Its website says that “hundreds of financial institutions” are using its RippleNet product to provide a better payment system. RippleNet connects users with these organizations around the world, with the goal of making money transfers more efficient.

Ripple Labs now says that “today ODL customers can reach more than 20 countries around the world for their payment needs.” It claims that its international ODL transactions have grown more than 25 times over the past year.

This new lawsuit will put more pressure on the Securities and Exchange Commission and possibly even Congress regarding crypto regulation. This may resolve the current lawsuit over whether or not XRP is a security. Should this happen, the cryptocurrency could benefit in earnest as the controversy over it ends.

At the date of publication, Mark Hack did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, and are subject to InvestorPlace.com’s posting guidelines.

Mark Hayek writes about personal finance on mrhake.medium.com and runs Total Return Value Guide that you can review here.

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