Judge Torres’ order for the SEC to turn up records from a 2018 speech by William Hinman, who was then the director of the SEC’s Corporate Finance Division, is a significant victory for Ripple Labs.
This decision follows a protracted legal dispute that could determine the future of numerous cryptocurrencies.
The SEC asked for clarification and a reversal of Judge Sarah Netburn’s earlier court decision that emails and drafts pertaining to a 2018 speech by the former Director were not covered by the due process privilege.
Due Process Privilege is a concept that refers to private conversations that result in the public declaration of governmental or policy decisions. Judge Netburn allowed the SEC’s move for clarification while rejecting the reconsideration request.
After the SEC reiterated its DPP claim, Judge Netburn ruled that the pertinent records must now be produced. The three orders were then the subject of objections by the SEC, which Judge Analisa Torres has recently rejected.
The SEC must now provide materials related to Hinman’s speech.
Hinman argued that the Ethereum network, cryptocurrency, and trades do not constitute securities-related activity while speaking at a symposium in June 2018.
The current offers and sells of Ether are not securities transactions, in my opinion, given the current nature of the cryptocurrency, the Ethereum network, and its decentralized structure.
The controversy surrounding Hinman’s remarks is more directly related to an SEC complaint brought in December 2020 against Ripple Labs, its former CEO Chris Larsen, and its current CEO Brad Garlinghouse.
The three defendants are accused by the SEC of making unauthorized gains from the sale of XRP coins as unregistered securities.