A new turn in Ripple’s ongoing case surfaces.
Ripple racked up another victory on Thursday as a federal judge ruled that the fintech startup can access the emails concerning a speech in which a former SEC official declared Ethereum is not a security. The ruling is significant because it could help Ripple make a strong case XRP is also not a security.
SEC Must Give Up William Hinman’s Emails On Ethereum
The SEC has been ordered to hand over emails as part of its ongoing case with San Francisco-based payments firm Ripple. The regulatory agency will need to provide Ripple with emails containing drafts of the watershed speech delivered by the former director of the SEC’s Division of Corporation Finance in 2018, where he concluded that Ethereum was not a security.
The SEC’s legal team has long maintained that these emails and multiple other documents are subject to “privilege”, therefore protected from discovery. The Magistrate Judge presiding over the case, Sarah Netburn, indeed concurred with the SEC regarding a couple of these documents but denied the agency’s argument for others.
Regarding the emails about the former SEC official’s speech, Judge Netburn ruled that they are not protected by privilege as they contained his personal opinions and not those of the regulator.
“The personal views of agency employees are not protected by the privilege unless they bear on ‘the formulation or exercise of policy-oriented judgment. […] Accordingly, emails concerning the speech or draft versions are neither predecisional nor deliberative agency documents entitled to protection,” the lengthy ruling said.
The judge further indicated that the SEC will, however, not have to surrender notes from any meetings held between Ripple and SEC employees as well as documents on communications between the agency’s crypto maestro Valerie Szczepanik and an office of the Treasury department.
Why Latest Ruling Is A Resounding Win For Ripple
The SEC sued Ripple back in December 2020 for allegedly raising over $1.3 billion from the sale of unregistered securities. Hinman’s speech has become critical to the SEC v. Ripple lawsuit, in which the agency contends the crypto firm and members of its leadership Brad Garlinghouse and Chris Larsen were aware their XRP digital asset was a security but sold it to the public anyway without the necessary registration.
For its defense, Ripple has requested documents that show how Hinman came to the conclusion that Ethereum was not a security. The company hopes such documents would help rubbish SEC’s allegations surrounding XRP’s legal status. In other words, Ripple’s attorneys are fighting to find out why Ethereum is held to different standards.
While the judge’s latest ruling is a major victory over the SEC, it has no bearing on the crux of the suit, which rests on whether the XRP token is a security.