The eagerly awaited “Hinman Documents” in the legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC) have been published today! After an initially modest reaction in the price of XRP, the altcoin experienced an increase of around 6% at the time of writing.
Just yesterday, Ripple CEO Brad Garlinghouse said that the Hinman documents would be worth the wait. He was alluding to the documents’ potential importance to their ongoing legal battle. And XRP investors seem to agree, although not all community members are enthusiastic.
Ripple Vs. SEC: This is what the Hinman docs reveal
Bill Morgan, a popular advocate in the XRP community, announced that Stuart Alderotti (Ripple’s Chief Legal Officer, CLO) and Brad Garlinghouse were “not exaggerating”. According to him, “#Ethgate is alive and kicking after all.”
The documents reveal that Bill Hinman, the former director of the Division of Corporate Finance at the SEC, engaged Ethereum founder Vitalik Buterin prior to his infamous speech in which he classified ETH as a non-security.
In the run-up to his speech, Hinman called on Buterin to confirm how Ethereum operates. The SEC’s internal documents also show that on May 31, 2018, opposition grew within the SEC to a recommendation to classify ether as a non-security along with bitcoin.
On June 4, Hinman shared a draft of his speech with the division directors of the commission. The document shows that Hinman was planning his call with Buterin for later that week.
Nevertheless, the SEC’s Office of General Counsel (OGC) suggested removing the mention of ETH in the draft. The OGC was concerned about the difficulties it would face if it took a different position on Ether in the future. As is well known, Hinman disregarded this directive and made ETH the focus of his speech.
This is one of the reasons Mr. Huber, a respected member of the XRP community, is disappointed. According to him, emails are “nothing but burgers”. They only prove that Hinman was repeatedly warned to avoid any reference to Ethereum in order to avoid market confusion.
“Despite these warnings, Hinman not only ignored this advice and doubled down, focusing his entire speech on giving ETH a regulatory monopoly. So clumsy director, writes Mr. Huber, who is one of Bill Hinman’s biggest critics, accuses him of a conflict of interest.
But lawyer Bill Morgan also sees arguments that help Ripple in its defense against the SEC. For example, counsel found several passages in the Rule 56.1 statement that speak specifically in favor of Ripple’s fair notice defense.
Several SEC communications indicate that SEC officials were well aware that the speech would create “more confusion” and that they intentionally wanted to give “fewer details” to industry participants, possibly to give the agency more leeway.
In addition, the documents show that the regulator has revised its internal views on factors that SEC staff had previously considered “not relevant” or even proved that the asset was not a security. Words that weren’t previously relevant were reworded, says Morgan.
For example, in 2018, the SEC held that lockups were not relevant and a sign of non-security. After that, the agency changed its mind.
At press time, investor publications were viewed as positive for XRP. The price is up 8% to $0.5609 since the Hinman docs were published.
Featured Image from Ryan, Swanson & Cleveland, PLLC, Chart from TradingView.com
source: www.newsbtc.com
