It’s another battle won by Ripple in its legal battle with the Securities and Exchange Commission (SEC). With the revelation of the Hinman documents, the company headed by Brad Garlinghouse is proving the SEC’s legal vagueness on the laws to be applied to cryptocurrencies such as XRP and Ether (ETH).
The SEC unveils the Hinman documents
After many months of patience, Ripple has finally won a battle with the Securities and Exchange Commission (SEC). Recently, the US institution publicly revealed new documents concerning William Hinman, a former SEC director working in the department dedicated to corporate finance
As part of the trial between the XRP issuer and the SEC, these files reveal email exchanges between Hinman and the regulator during a speech to be prepared. Written in 2018, Hinman discussed the regulation of cryptocurrencies:
1/ It’s been 5 years since Bill Hinman gave his infamous speech – and through the SEC’s lawsuit against @Ripple (and 7 court orders), we can finally share what happened behind the scenes through the now public emails / drafts of the speech. pic.twitter.com/sx2TpW0TYe
– Stuart Alderoty (@s_alderoty) June 13, 2023
“It’s been 5 years since Hinman gave his infamous speech – and thanks to the SEC’s lawsuit against Ripple, we can finally share what went on behind the scenes through emails and drafts of the speech now publicly available. “
According to these email exchanges, Hinman was suggesting that Bitcoin (BTC) and Ether (ETH) should not be considered “securities”. However, in drafts of the speech, the SEC asked Hinman not to rule on the regulation of ETH:
“We are not going to rule on the regulation of ETH.
“We still have reservations about including a statement directly about Ether in the speech. Even with the caveats in the sentence, it seems like it would be difficult for the agency to take a different position on Ether in the future. “
Despite these revelations and the crypto community’s interest in the documents, XRP’s reaction is still a long time coming. Since 13 June, when the information was made public, the Ripple cryptocurrency has seen a fall of around 10%, from $0.52 to $0.47.
However, it should be noted that the entire market has fallen in the last 24 hours, in response to the Fed’s latest statements. It is therefore difficult to know what the real impact of the Hinman documents will be on the XRP.
Ripple vs SEC: a confrontation that drags on
The SEC has been suing Ripple for two and a half years now. The reason? According to the US authorities, Ripple sold unregistered securities for a total of $1.38 billion in XRP.
In reality, the problem is as follows: Ripple and the SEC do not have the same definition of the regulation that should apply to XRP. According to Ripple, this cryptocurrency cannot be considered a financial security.
However, since a fundraising operation was carried out to sell XRP and the majority of the funds were held by the company and its founders, the SEC considers that this cryptocurrency must follow the regulations in force for financial securities.
The SEC also took aim at Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. They are alleged to have made $600 million from the sale of XRP without recording their personal transactions.
Today, Ripple is no longer the only company in the industry to be sued by the SEC. Last week, exchange platforms Coinbase and Binance were attacked by the US regulator for the unrecorded sale of a dozen cryptocurrencies considered to be financial securities, including MATIC, SOL and ADA.
