While the Securities and Exchange Commission (SEC) keeps battling the courts, the courts keep telling the SEC to hand over the “emails and drafts” pertaining to the speech given by former SEC Corporate Finance Director William (Bill) Hinman discussing crypto in June of 2018.
In the ongoing legal battle between Ripple, and this issuance of XRP – a digital asset, the SEC appears to be very concerned regarding internal documents the court has determined are not protected by attorney-client privilege or as “deliberative process privilege.” These documents involve internal discussions regarding Ethereum and its treatment by the SEC.
In 2018, Hinman delivered a speech where he declared that Ethereum is NOT, in fact, a security – something the Commission would apparently like to roll back. At that time, Hinman stated:
“… And putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”
While Hinman left the SEC in late 2020, he is still at the crux of the ongoing court case. The SEC has filed motions to exclude the information multiple times, but the judges handling the case keep overruling the objections.
The court has now directed the SEC to hand over the documents and comply with the Orders – a move that may tip things in Ripple’s favor.
Ripple and several executives were originally charged with the sale of unregistered “digital asset securities offerings” back in December of 2020. While Ripple continues to operate, XRP has ebbed and flowed depending on the periodic revelations on the court case that has no end in sight.
Ripple General Counsel Stuart Alderoty recently said that “after two years of litigation, the SEC is unable to identify any contract for investment (that’s what the statute requires); and cannot satisfy a single prong of the Supreme Court’s Howey test” adding that “Everything else is just noise.” As XRP is not a security, the SEC has no jurisdiction.
The filing may be viewed here.