XRP has gained solid ground this week. The cryptocurrency’s price saw gains of up to 19% today as it remade losses from its steep drop on May 11th. This price increase comes on the same day that the SEC v. Ripple court hearing is set to take place. However, in a fascinating chain of events, emails have been uncovered that show a potential conflict of interest involving an SEC employee that could jeopardize the entire case.
In addition to this promising piece of evidence in favor of XRP within its court case, Japan announced this week that SBI Holdings, a financial services company group based in Tokyo, would now accept XRP payments. This makes the token officially mainstream in the nation.
What Is XRP Crypto?
Ripple is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc., a US-based technology company. Released in 2012, Ripple is built upon a distributed open source protocol, and supports tokens representing fiat currency, cryptocurrency, commodities, or other units of value such as frequent flier miles or mobile minutes. Ripple purports to enable “secure, instantly and nearly free global financial transactions of any size with no chargebacks”. The ledger employs the native cryptocurrency known as XRP.
Ripple was conceived by Jed McCaleb and built by Arthur Britto and David Schwartz who then approached Ryan Fugger who had debuted in 2005 as a financial service to provide secure payment options to members of an online community via a global network.[4][5] Fugger had developed a system called OpenCoin which would transform into Ripple.[6][7] The company also created its own form of digital currency referred to as XRP to allow financial institutions to transfer money with negligible fees and wait-time.[8] In 2013, the company reported interest from banks for using its payment system
Lawsuit Issues
In December 2020, the SEC filed a lawsuit against XRP Labs over allegations that XRP was issued as an unregistered security. Ripple and its Co-Founders Chris Larsen and Brad Garlinghouse are being hit with a $1.3 billion lawsuit that alleges they authorized an unregistered securities offering through the XRP sale.
The SEC claims that XRP is an unregistered security. However, SBI Holdings, the Japanese conglomerate group, has a different opinion. Since the group accepts XRP payments, the group considers Ripple a digital asset and not a security.
Conflict Of Interest
Earlier today, anti-corruption watchdog Empower Oversight retrieved and shared William Hinman’s emails. Hinman is the SEC’s former director of corporate finance, and the SEC tried to protect the emails. They center around a speech Hinman made in 2018 stating that Ethereum is not a security. According to Empower Oversight, the emails show that Hinman made the speech knowing he had a conflict of interest before delivering it and was warned by the SEC’s Ethics Office that he needed to recuse himself.
The conflict of interest in question is Hinman’s ties to a law firm that supports Ethereum. After Hinman gave the speech in question, the price of Ethereum rose and Hinman ultimately rejoined the firm shortly after the XRP lawsuit was filed. According to Empower Oversight, Hinman failed to disclose his ties to the law firm at the time of the speech.
The Future of XRP
XRP continues to grow in mainstream adoption and popularity in spite of its ongoing SEC lawsuit. This mass adoption, mixed with the big piece of evidence that could do away with the entire trial, bode well for XRP in the near- and long-term.