XRP and ETH: Can the upcoming deposition in SEC v. Ripple drive prices?
“We have seen a sharp increase in trading volumes related to an increase in volatility”, said FX Open’s Natalia Zakharova.
The Court has ordered the deposition of ex-SEC Director William Hinman to take place as requested by Ripple Labs.
The ruling found strong resistance from the Securities and Exchange Commission – with some even considering it a desperate position – but Sarah Judge Netburn found the case unique enough to justify the testimony of the former high-ranking government official.
At the center of the deposition will be Hinman’s speech in 2018 in which he said Ether is not a security. Now claiming it was a personal view, it was understood at the time he was speaking on behalf of the agency, and with good reason.
In addition, the ex-SEC Director is being accused by XRP holders of conflict of interest for his links to the Ethereum Alliance. With Ethereum being dragged to the lawsuit as Ripple builds its fair notice defense, it can be questioned if the SEC could turn against ETH to clean up its act.
The SEC and Ripple have stated they made progress on the privilege issues ahead of the deposition, which was rescheduled to July 27. Still, Ripple might need a Special Master to rule on the SEC’s objections.
Ripple, on the other hand, has found massive support among the XRP community, with the XRP Holders’ attorney John Deaton even pitching basic questions that don’t fall under the privilege argument.
We spoke to Natalia Zakharova, Head of Sales at FXOpen, for a quick commentary regarding XRP trading since the lawsuit as the broker offers the XRP/USD CFD as part of its crypto offering.
“We have seen a sharp increase in trading volumes related to an increase in volatility. There was (and still is) a lot of interest both from institutional investors looking to hedge their positions and retail traders, willing to benefit from the sharp market movements”.
“The lawsuit sent waves of volatility across trading venues, which is obviously good for brokers. However, we immediately saw restrictions coming from some of our LPs, exchanges delisting XRP, and us having to adjust our risks accordingly.
“Fortunately we were able to maintain tight pricing, mostly due to our technology which allows all market participants to act as price makers and thus ensure good liquidity levels”, said Ms. Zakharova (full interview here).
The market is clearly following the lawsuit and the William Hinman deposition on July 27 will likely be a key event as Ripple looks to gain leverage against the Securities and Exchange Commission in order to get the best settlement deal and, possibly, expose the agency’s missteps.
The best possible deal, however, may still be bittersweet as the settlement could include certain restrictions that would bottleneck the flow of XRP, according to attorney Jeremy Hogan.
The Hinman deposition could also put pressure on ETH, depending on what truths come to light besides what is already known, including the SEC revisiting the nature of Ether, if it is a security or not. According to Mr. Hogan, the “danger rating” of ETH and ETH2 being securities is quite high.