SEC delays ruling on Ripple

The US Securities and Exchange Commission (SEC) has asked to invalidate documents related to 2018 in which Hinman claims things crucial to the outcome of the legal dispute between the US regulator and Ripple Labs sparking criticism from sympathizers and investors.

A week ago, the Securities and Exchange Commission filed the motion to block the above summary judgment document. 

The request specifically mentions information and documents that relate to the 2018 speech by the former US regulator’s executive. 

William Hinman was serving as director of the finance division in 2018, and in June of that year, he had stated during a speech that the Ethereum (ETH) crypto was not to be considered a security.

That speech, according to lawyers, is the key evidence to tip the scales of justice in favor of Ripple Labs against the SEC. 

In the regulator’s position statement, the Securities and Exchange Commission believes that the motion filed should even trump the right (thus that the SEC is above the law) to have access to documents if it believes they have no relevance to the determination of the case before the US Court.

In addition to the non-presentability of Hinman’s above-mentioned speech, the SEC also made a request about the deletion of any citation of that document even in the defendants’ documents as if the deposition never took place. 

The Securities and Exchange Commission (SEC) tries to get the better of Ripple

The regulator’s move drew the fiercest criticism not only from Ripple Labs supporters and crypto insiders, but from every US citizen who has been following the case as being outrageous and dangerous to the law. 

On Twitter, James K. Filan raised doubts that Gary Gensler, chairman of the Securities and Exchange Commission, has an agenda he keeps secret and wrote about it:

“The SEC has filed its Motion to seal certain documents filed in connection with the Motions for Summary Judgement.”

In the request, the SEC also saw fit to protect the information of its witnesses and experts who intervened in the case against XRP in addition to concealing the statements of those who invested in Ripple Labs’ native token. 

For its part, Ripple Labs is pressing for a court ruling and on the 2nd of this month filed its final motions against the SEC with the hope that it will soon see light at the end of the tunnel. 

It had taken the company a year and a half to be able to gain access to Hinman’s statements and approval of them in the process and now it seems that everything has been called into question thanks to the US regulator’s overwhelming power.

The judge had granted Ripple that the documents be made public with these words:

“After a reasonable investigation, the information known and currently available is not sufficient to allow the Commission to grant or deny this request.”

The pivotal reason why the US Securities and Exchange Commission (SEC) does not want the document to be used for prosecution purposes is that it is not certain that it is Hinman himself who is speaking in the video. 

William Hinman, former director of the SEC’s Division of Corporation Finance, is a well-known person in the world of finance, and according to Ripple’s lawyers, it is absurd to suspect that the video was tampered with since there are thousands of people who can testify as they were present at the conference.

The lawsuit continues

According to a motion on Wednesday to compel requests for admissions (RFAs) filed by Ripple Labs’ legal team, Debevoise & Plimpton on Wednesday filed a motion in order to compel the admission of the document and also all others filed but blocked at that time.

“The SEC has failed to respond in accordance with applicable rules regarding 53 RFA on important matters where there is no genuine dispute.”

Ripple basically asked the court to accept the evidence provided and the video of the former chairman of the SEC finance committee because the reasons given by the regulator are unacceptable. 

Hinman is easily recognizable from both a visual and audio perspective by anyone viewing the material, and the SEC’s position of not confirming the validity of the document is completely irrelevant. 

“The SEC will neither confirm nor deny that it is Bill Hinman. I hope this is all just a bad bad dream. Is this really the United States of America Securities and Exchange Commission? Is this why the SEC needs a $2.5 billion budget?”

One user commented on Twitter.

Supporting the authenticity of the video are not only the testimonies of thousands of those present but also that of Georgetown law professor Chris Brummer, who had uploaded the video at the time of the events. 

The account has been confirmed to be authentic by attorneys and dates back to 2016, moreover the information present is the same as that used by the professor on the other social networks where he is present.

The identity of the video is easily provable and dismantles the doubts of the SEC, which nevertheless remains doubtful. 

“Subject to all of the above objections, and after a reasonable investigation, the information known and currently available is not sufficient to allow the Commission to admit or reject this claim.”

In the spring, Empower Oversight had gone to the regulator’s aid, claiming to be in possession of documents in which Hinman was found to have a direct financial conflict of interest with the law firm Simpson Thacher & Bartlett which is itself part of the Enterprise Ethereum Alliance (EEA). 

According to Crypto Law founder John Deaton, founder of legal news outlet Crypto Law:

“If Hinman hasn’t conflict-screened the speech, it’s a no-brainer.”