The Securities and Exchange Commission (SEC) has suffered a blow in its case against Ripple, after a U.S. judge has denied its claims for attorney-client privilege regarding internal documents related to the “Hinman speech”.
In denying the motion on July 12, U.S. Magistrate Judge Sarah Netburn called out the SEC’s hypocrisy in arguing that the speech — in which a former official Bill Hinman suggested ETH was not a security — was a personal matter for Hinman while also claiming it should be protected because he received legal advice from the SEC to confirm the commission’s policies.
“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.”
The draft of the Hinman speech, which the SEC has fought to keep under wraps, has been seen by many in the XRP community as a pivotal piece of evidence that could work in favor of Ripple Labs.
The SEC sued blockchain firm Ripple in late 2020 on allegations that senior executives Brad Garlinghouse and Christian Larsen sold Ripple’s XRP tokens as unregistered securities.
However, Ripple has argued that the speech made by former director of the Division of Corporation Finance Bill Hinman in 2018 stated that Ether (ETH) did not constitute “securities transactions” — contradicted to the SEC’s stance on the matter.
This was not even a nuanced opinion. Judge Netburn tore apart every SEC argument for attorney-client privilege of the Hinman emails.
That starts the 14 day clock for an appeal to Judge Torres. And if her recent Orders are any precedent, things will move relatively fast. https://t.co/7k6KJx4Lea
— Jeremy Hogan (@attorneyjeremy1) July 12, 2022
Barring any further appeals or delays, the ruling states that: “The documents must be produced.”
Related: Class action lawsuit claims Solana’s SOL is an unregistered security
Delphi Digital’s general counsel Gabriel Shapiro called it a “big tactical win for Ripple” in a July 12 tweet.
wow. big tactical win for Ripple. https://t.co/oS4HRO1u2x
— _gabrielShapir0 (@lex_node) July 13, 2022
Some believe that an appeal by the SEC is likely. Founder of crypto legal news outlet Crypto-Law…
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