A recent Office of Inspector General (OIG) investigation has uncovered potential conflicts of interest within the U.S. Securities and Exchange Commission (SEC), raising new questions about the agency’s handling of cryptocurrency regulations.
The controversy intensified after reports surfaced that former SEC Chair Gary Gensler withheld key findings on crypto bias before stepping down on January 15, 2025.
This revelation could have a significant impact on the SEC’s appeal against the Programmatic Sales ruling in the Ripple case, influencing XRP’s legal standing and the broader crypto industry.
OIG Investigation and Its Impact on SEC’s Legal Strategy
The OIG’s findings may determine how the SEC proceeds with its legal battle against Ripple. The investigation was prompted by whistleblower complaints from Empower Oversight (EO), which alleged that former SEC officials had conflicts of interest while overseeing crypto regulations.
At the center of the controversy is former SEC Director of Corporation Finance Bill Hinman, whose 2018 speech declaring Bitcoin (BTC) and Ethereum (ETH) as non-securities has been widely debated.
Hinman was accused of maintaining financial ties with Simpson Thacher, a law firm connected to the Enterprise Ethereum Alliance—raising concerns that his statements may have been influenced by external interests.
Despite warnings from the SEC’s Ethics Division, Hinman allegedly continued engaging with Simpson Thacher representatives. Court documents also revealed that the SEC attempted to block the release of internal communications related to his speech.
If the OIG investigation confirms conflicts of interest, the SEC could face pressure to withdraw its appeal against Ripple and reconsider its regulatory stance on other crypto firms.
In response, EO and journalist Eleanor Terrett have filed FOIA (Freedom of Information Act) requests for the full OIG report. After failing to receive a response, EO took legal action against the SEC to obtain the findings.
XRP Price Trends and Market Implications
The uncertainty surrounding the SEC’s appeal, the OIG probe, and the possibility of an XRP-spot ETF approval are shaping the market outlook for XRP.
On February 25, 2025, XRP saw a sharp 10% decline, falling to $2.21, in line with a broader crypto market drop of 7%, which brought the global market cap down to $2.7 trillion.
If the SEC drops its appeal, XRP could potentially break past its all-time high of $3.55. However, a prolonged legal battle may limit its price growth, keeping it below $1.50.
The potential approval of an XRP-spot ETF could further drive institutional investment, pushing the price toward $5.
Conclusion
The SEC’s silence on the OIG report has fueled speculation regarding its next move in the Ripple case. If the findings confirm misconduct, the agency’s legal standing could be severely weakened, increasing pressure to abandon its appeal.
With XRP investors closely watching regulatory and ETF-related updates, the coming weeks could play a crucial role in shaping XRP’s market trajectory and the future of crypto regulations in the U.S.
Anthony Pedro
Anthony Pedro is a seasoned crypto writer with a deep passion for blockchain technology and digital currencies. With over 4 years of experience in the cryptocurrency space, Anthony has become a trusted voice, offering insightful analysis and commentary on the latest trends, innovations, and market movements. When not writing, he is actively engaged in the crypto community, attending conferences, advising blockchain startups, and experimenting with new projects.