Non-Profit Government Watchdog Mounts Pressure on SEC on Ripple Case

Empower Oversight, a non-profit government watchdog, announced on Tuesday, May 16th, that it had filed another Freedom of Information Act (FOIA) request with the Securities and Exchange Commission (SEC). The FOIA pertains primarily to the agency’s targeting of XRP and is the second such request in under two weeks.

Empower Oversight Files Second FOIA Request With SEC

This Tuesday, Empower Oversight filed a FOIA request with the SEC inquiring about its referral of evidence to the Inspector General, and targeting of Ripple Labs and XRP. According to the announcement, the watchdog aims to discover possible ethical violations.

Empower Oversight filed another FOIA request last week which is, in turn, seeking to force the Securities and Exchange Commission to comply with another such request filed in December 2022. Said FOIA is similarly seeking information on possible conflicts of interest within the agency pertaining to “conflicts of interest and selective enforcement by former high-level officials regarding cryptocurrencies”.

“Americans have an interest in learning how the SEC OIG handled this referral and how the SEC Ethics Office dealt with the conflicts outlined. The law requires transparency from the SEC and other agencies to ensure accountability. The evidence of SEC’s bad faith and history of resisting its legal obligations to comply with our previous requests raises reasonable suspicions that demand more sunlight and public scrutiny.”

Tristan Leavitt, President of Empower Oversight

The watchdog also stated that the Commission’s failure to properly address concerns over possible conflict of interest is working to undermine the confidence in its actions, as well as its credibility with the public.

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SEC Facing Mounting Pressure Over Crypto Regulation

Over the recent months, the SEC has been under increased pressure both by the industry, and certain politicians with regard to its aggressive approach toward cryptocurrencies. In many ways, Coinbase, one of the largest cryptocurrency exchanges in the world, has been leading the charge.

Coinbase has been criticizing the Commission’s approach since receiving a Wells notice and highlighted its numerous attempts to work with the regulators. More recently, it sued the agency seeking to receive an answer on the prospects for the development of cryptocurrency-specific rules.

Earlier today, however, the SEC asked the court to reject Coinbase’s request. Apart from the industry, the Commission has been receiving pushback both from numerous politicians and from some of its own Commissioners. Additionally, while the Subcommittee on Digital Assets, Financial Technology and Inclusion is sharply divided in its stance toward cryptocurrencies, it has recently started increasing its efforts making industry-specific regulation likely with, or without the SEC.

Editorial note (May 17th, 2023, 11:09 AM EST): The headline was altered for clarity.

Do you think there are conflicts of interest within the SEC when it comes to cryptocurrency regulation enforcement? Let us know in the comments below.