SEC must turn over Hinman documents to Ripple Labs

SEC must turn over Hinman documents to Ripple Labs

Ripple Labs won a lawsuit with the US Securities and Exchange Commission (SEC) on September 29. Judge Analisa Torres ruled that the SEC must turn over documents written by former director of the SEC’s corporate finance division, William Hinman. The documents mostly relate to a speech Hinman gave at the Yahoo Finance All Markets Summit in June 2018.

Hinman explained in his speech that ether (ETH) is not a security. Ripple Labs considers this speech to be an important piece of evidence in the case. The SEC claims that the sale of Ripple’s XRP violates US securities laws. However, it remains to be seen whether the words used in the speech are as meaningful as the company claims. The circumstances and Hinman’s actions leading up to this speech have caused much confusion.

In her decision, Judge Torres dismissed the SEC’s objections to the release of the documents. Shortly before that, District Judge Sarah Netburn said the emails and draft speech were not protected by process privileges, as the SEC had claimed. The SEC then wanted to enforce attorney-client privilege on the documents. Judge Netburn denied that in July. Judge Torres’ decision denied the SEC’s appeal of that decision.

In December 2020, the SEC filed a lawsuit against Ripple Labs and its current CEO, Brad Garlinghouse, and former CEO, Chris Larsen. She claimed the company’s cryptocurrency, XRP, is a security because the company used it to raise capital in 2013. The case is a relatively rare example of an SEC lawsuit going to court, potentially resulting in a precedent-setting decision rather than a settlement.

At first, things looked bad for Ripple, and the company has used multiple strategies to defend itself. Ripple Labs and the SEC filed motions for a summary judgment on Sept. 17.

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