In Case Against Ripple, SEC Will Have To Submit Hinman’s speech to Court
U.S. Justice of the Peace Sarah Netburn on July 12 denied the Securities and Exchange Commission’s (SEC) motion to enforce the “attorney-client confidentiality of internal documents” rule over a speech by former SEC official Bill Hinman in which he suggested ETH was not a security.
After announcing the decision, the judge stated:
“The hypocrisy in arguing to the Court, on the one hand, that the Speech is not relevant to the market’s understanding of how or whether the SEC will regulate cryptocurrency, and on the other hand, that Hinman sought and obtained legal advice from SEC counsel in drafting his Speech, suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law.”
It was on Hinman’s speech, carefully concealed by the Commission, that the defenders of Ripple Labs relied on as key evidence that could work in favour of the company.
The trial about this case has been going on for quite some time. The SEC sued Ripple in late 2020, accusing the company of top executives Brad Garlinghouse and Christian Larsen selling Ripple’s XRP tokens as unregistered securities.
But Ripple claimed that a speech given by former SEC Finance Director Bill Hinman in 2018 stated that ETH is not a “securities transaction,” which contradicts the SEC’s position on XRP.
If the content of the Hinman speech documents is convincing enough, it could be a game-changer for Ripple in a case that is seen as potentially setting a precedent for other similar crypto token issuers.