- Hinman’s 2018 document has been a source of lengthy arguments between the SEC and Ripple.
- Ruling sparks widespread jubilation among XRP holders.
The legal dispute between the US Securities and Exchange Commission (SEC) and blockchain firm, Ripple, took a new twist yesterday following a recent ruling by Judge Sarah Netburn. Judge Netburn has finally dismissed SEC’s claims that there is attorney-client protection against William Hinman’s 2018 document.
A part of the Judge’s ruling reads, “the SEC’s claims is denied. In accordance with the court’s order on April 11, 2022, the SEC is mandated to present two redaction proposals for the court to review.” It is worth noting that the SEC can still appeal against this ruling. It can do so before Judge Analisa Torres. However, the regulator has only two weeks to file the appeal.
Controversy over William Hinman’s 2018 testimonial
The argument over Hinman’s testimonial lasted for many months. Hence, the ruling represents a massive win for Ripple. Ripple has been using various means to prove that it wasn’t selling its native token (the XRP) as securities. The SEC accused Ripple of selling its XRP tokens as securities, a breach of US regulatory laws.
The 2018 William Hinman testimony was one of the ways Ripple was using to defend itself against the SEC’s assertions. Hinman was an ex-director of finance at the regulator. In 2018, Hinman made remarks about Ethereum, saying it wasn’t a security.
Ripple assumed that Hinman’s remarks about Ethereum extend to Ripple’s XRP since they share similar characteristics under the context of Hinman’s speech. Consequently, the blockchain firm suggested that the SEC produce the internal document containing Hinman’s 2018 remarks.
However, the SEC denied Ripple of that privilege, citing attorney-client privacy. The SEC previously denied Ripple access to this document under the Deliberative Process Privilege (DPP). However, Judge Netburn denied this SEC’s claim.
Then, the SEC claimed that Hinman held internal discussions with some of the regulator’s legal counsel before delivering his speech. Hence, the document is protected under attorney-client privacy since Hinman is technically a client. However, Ripple wasn’t comfortable with this claim. Therefore, it challenged the assertion, which lasted for many months.
Since neither Ripple nor SEC was willing to let go, Judge Netburn held a discussion with both parties on June 7. Following the debate, many industry analysts following the matter predicted that it is likely that the Judge would force SEC to release this Hinman document.
After an on-camera review of 10 exemplar documents, Judge Netburn ruled that the SEC must produce the documents. The Judge added that the main reason for the internal discussion wasn’t for legal advice.
Massive jubilation among XRP holders
XRP holders on various social media platforms expressed their delight following the ruling. Attorney Jeremy Hogan (one of Ripple’s legal counsel) stated via Twitter that he was happy to see the jubilation among XRP holders on Twitter. He added that it’d been a while since such had happened.
As much as I enjoyed the legal victory (and the Judge seeing right through the SEC deceit), I was even more glad to see the excitement and happiness on crypto-Twitter, again. It's been awhile.
G'night from the newest member of the Hogan family "Tappi" the tortoise. pic.twitter.com/TokkMyzKe0
— Jeremy Hogan (@attorneyjeremy1) July 13, 2022