‘Big Win’ for Ripple as court orders SEC to reveal internal documents comparing XRP with utility token Ether

YEREVAN (CoinChapter.com) – The U.S. Securities and Exchange Commission (SEC) appears compelled to reveal its internal documentation concerning the 2018 “Hinman Speech,” according to Magistrate Judge Sarah Netburn’s Apr. 11 ruling in favor of Ripple, a San Francisco blockchain firm facing allegations of conducting illegal securities sales.

The issue revolved around William Hinman, the former Director of the Corporation Finance Division at the SEC, who, in his June 2018 speech, commented that “the Ethereum network and its decentralized structure, current offers, and sales of Ether are not securities transactions.”

Also read: SEC vs. Ripple: Motion to quash Hinman deposition transcript released.

Ripple lawyers aimed to depose Mr. Hinman on the matter, i.e., order his testimony before the court, as XRP’s identification as an Ethereum-like utility token became a cornerstone in the case. As a result, The fact that the agency didn’t extend the same ‘courtesy’ to larger cryptocurrencies like Bitcoin and Ethereum became the cornerstone of the lawsuit and one of the primary defense fronts.

The SEC’s assertion that the Speech was intended to communicate Corporation Finance’s approach to regulating digital asset offerings is inconsistent with the SEC’s and Hinman’s previous position that the Speech was intended to and did reflect his personal views.

The SEC seeks to have it both ways, but the Speech was either intended to reflect agency policy or it was not. Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its own position.

commented Judge Netburn in Apr. 11 ruling.

Also read: Ripple-SEC update: Both parties file opposition to the other's motions.

What is ahead for Ripple?

James K. Filan, a lawyer involved in the case, commented that Ripple’s ruling is a “big win.” The ‘war’ is far from over, but SEC might have lost the ‘Hinman battle.’ Thus, the law enforcement agency has to produce the documents concerning the speech.

Additionally, Magistrate Judge has already reviewed the said documents in confidence.

The Court conducted an in-camera review of exemplar documents […]. Based on its review of the documents, the Court granted the Defendants’ motion to compel production as to certain parts of Entry 1 of Appendix A, and in full as to Entry 9 of Appendix A. ECF No. 413.

read the ruling.

Also read: Judge Netburn to take the biggest decision in the Ripple vs. SEC case.

Thus, the court could soon grant Ripple some clarifications on XRP’s status. Notably, the battle between other branches of defense and prosecution is still ongoing. However, the court might soon close the ‘Hinman Speech’ debate for good, which would constitute a substantial breakthrough in the case.