The Securities and Exchange Commission’s case against Ripple Labs lingers, and the most recent of events has seen the U.S. regulatory body hit hard by an unfavorable ruling. A judge presiding over the suit has repudiated the SEC’s attorney-client protection claim as a reason not to release documents pertaining to the Hinman speech.
Judge Netburn says the SEC’s motion is for personal gain
Magistrate Judge Hon. Sarah Netburn, on 12 July, rejected the SEC’s motion to keep the Hinman speech concealed, calling the proposal hypocritical. Judge Netburn called out that the SEC’s patent aims to use the litigation tactics for its personal goal and does not necessarily have regard for the law and aims to uphold it.
The SEC’s case against Ripple stands on the foundation that XRP, Ripple’s native token, is classified as a security and, as a consequence, ought to have been registered regarding the appropriate regulatory demands before being put on the market.
Ripple argues that the token is not a security, further stating that there was no prior revelation made by the SEC of its intention to classify XRP as a security. To corroborate its argument, Ripple cites a speech by William Hinman that makes its case a solid one.
Hinman’s speech is an important step towards victory for Ripple
William Hinman (also Bill Hinman), in a Fintech Work Conference in 2018, noted that ETH could not be classified as a security. Hinman said this while serving as director for the Division of Corporation Finance at the SEC. This revelation directly negates the SEC’s claim against Ripple’s XRP.
The SEC said it could not confirm nor deny that the person speaking in the video was, in fact, Hinman. When internal documents to ascertain the authenticity of the speech were demanded, the SEC filed a motion to keep the documents private, citing attorney-client privilege.
Judge Netburn’s decision to decline the motion has been regarded within the crypto community as a win for all, especially as legal expert John E. Deaton revealed that a ruling against XRP could spell doom for practically all altcoins, as they could all be dubbed “unregistered securities.”
Speaking on the recent ruling by Judge Netburn, Deaton has noted that an appeal from the regulator will likely come up within 30 days, including Ripple’s objection. However, he believes the appeal would be fruitless as the appeal’s judge will uphold Judge Netburn’s decision.
Hinman’s speech is an important step toward victory for Ripple as long as the documents can convince the court that Hinman was speaking under the authority of the SEC and the speech was not a “purely personal errand.”