Ripple General Counsel Calls SEC “Bouncing Regulator” For Shifting Stance On Hinman Speech

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Alderoty describes the SEC as “the bouncing regulator.”

In a tweet on Sunday, Ripple General Counsel Stuart Alderoty highlighted the continuous shift in the US Securities and Exchange Commission’s claims during the two-year legal battle, describing the SEC as “the bouncing regulator.”

Follow the bouncing regulator.

“Howey provides a clearly expressed test for determining what constitutes an investment contract.” SEC 4/22/21

“Hinman’s speech provided thirteen expressly non-exhaustive factors that market participants could consider.” 12/2/22

— Stuart Alderoty (@s_alderoty) December 4, 2022

In the tweet, Alderoty highlights two quotes from the SEC, the first asserting that the Howey test decided what constitutes an investment contract and the second implying that the Hinman speech should serve as guidance for market participants.

It is worth noting that the documents relating to the draft of the controversial William Hinman speech in 2018 have been hotly contested in the legal battle. Hinman, an SEC director at the time, asserted that Bitcoin and Ethereum are not securities. The SEC initially dismissed the speech as Hinman’s personal opinions and not indicative of the SEC’s stance.

However, Ripple believed otherwise, requesting that the regulator hand over emails and documents related to the drafting of the speech. Notably, after multiple refusals to requests by Judges Sarah Netburn and Analisa Torres, arguing attorney-client privilege, the regulator finally handed over the documents to Ripple.

Alderoty confirming the development in October, asserted that Ripple’s case had received a big boost. Now, per the SEC’s redacted reply to Ripple’s response to its motion for summary judgment, as quoted by Alderoty, the SEC appears to have shifted its stance on the significance of the Hinman speech.

It bears mentioning that Alderoty confirming that Ripple had filed its reply to the SEC’s response to its motion for summary judgment, sub-tweeted the SEC implying that the regulator has failed to be forthcoming with the court.

Notably, all that’s left in the two-year-long legal battle is for Judge Analisa Torres to give her ruling. As previously reported, pro-Ripple attorney James Filan expects this ruling on or before the end of March 2023.

Ripple chief Brad Garlinghouse commenting on the case’s progress, asserted that the firm remains committed to fighting for clear guidelines for the crypto industry. Notably, a win for the SEC could see the regulator expand its reach in crypto enforcement using the Ripple case as a precedent without a need to establish clear guidelines despite the calls from industry participants.

In response to Alderoty’s tweets on Sunday, several XRP holders and Ripple supporters highlighted that it was a clear example of how the regulator continuously shifted the goalpost.

Actual footage of the goalpost being moved pic.twitter.com/9qF8bqKbIc

— Max Avery (@realMaxAvery) December 4, 2022

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