The next 24 hours are extremely important for the entire crypto industry for several reasons. In addition to macroeconomic events this week, they also have the potential to massively influence prices on the crypto market.
Today, Tuesday, June 13, the US Securities and Exchange Commission (SEC) will be at center stage at least four times. But perhaps the event with the biggest potential impact is the SEC’s alleged unsealing of internal Hinman documents in the Ripple case.
The Hinman documents may shed light on the previous classification of Ethereum (ETH) as a non-security, which is now being challenged by SEC Chairman Gary Gensler. At the start of the legal dispute with Ripple, the SEC had already requested the Hinman documents be declared invalid.
In June 2018, William Hinman, then director of the SEC’s Financial Division, announced in a speech that the cryptocurrency Ethereum was not to be considered a security. For Ripple, therefore, these documents are of particular importance.
In its request, the SEC cites the need to protect the confidentiality of sensitive internal data. Furthermore, the SEC argues that documents relating to the Hinman speech are “not relevant” to the proceedings.
However, Ripple sees it completely differently. Just yesterday, Ripple CEO Brad Garlinghouse wrote In a reply tweet:
I wish I could go into depth now but we’ve waited so long (18+ months) I don’t want to go any further… suffice it to say @s_alderoty and believe me they were worth the wait.
Remarkably, the Hinman documents could be of paramount importance not only for Ripple, but for the entire crypto industry. As Bitcoinist reported, they also have the potential to dismiss the SEC’s claims in the Coinbase and Binance lawsuits if they include statements regarding the classification of secondary market transactions of crypto assets.
There is likely to be a bullish reaction from not only XRP but also one of the altcoins most affected by the SEC’s Binance/Coinbase lawsuits in recent days.
Other Major Events for Crypto on June 13th
Also of paramount importance will be a hearing on the SEC’s temporary restraining order (TRO) against Binance US at 2 PM EST. The SEC last week asked a federal judge in Washington, DC to freeze the assets of Binance’s US subsidiary.
Binance US has since filed an opposition to the SEC’s request. Aadhaar points out that the move will cripple the company’s business and harm its customers.
Binance US claims it has made “significant efforts” to cooperate with the SEC investigation since December 2020. The company also confirms that CEO Changpeng Zhao is the owner of BAM Trading’s bank account, but claims that he does not have signing authority for the account.
BinanceUS has brought on four attorneys from Milbank LLP, including former co-director of the SEC’s Enforcement Division, Jorge Canelos, as the beleaguered crypto platform prepares its defense.
Another major event: The US Securities and Exchange Commission (SEC) also has to respond to Coinbase’s petition for rulemaking by today. Four weeks ago, the SEC provided its first response, saying that any rulemaking could take years and that enforcement actions would continue in the meantime.
1. Hearing on Motion to Seize Binance Assets at DDC;
2. Issue of Hinman docs in SDNY;
3. SEC’s response to the order @ coinbase Petition in the 3rd Circ.
Not every federal court day in crypto is eventful, but tomorrow is. God bless the American courts.
— paulgrewal.eth (@iampaulgrewal) June 13, 2023
Last but not least, the public comment period for the SEC’s proposed expanded definition of exchange also ends on Tuesday. The expanded definition may result in DEXs being required to register as securities exchanges.
As ConsenSys lawyer Bill Hughes writes, this is compelling evidence that new US legislation is urgently needed. The proposal puts the onus on the blockchain space to correctly guess the rules.
This means that anyone who makes the wrong guess – from software companies like ConsenSys to the software developers who use our products – could potentially face stiff penalties. Hughes says, “It also allows the SEC to determine that a rule was broken after the fact – a form of retroactive punishment that deters due process.”
At press time, the total crypto market cap stood at $1.027 trillion after falling below the 200-day EMA on Saturday.
Total Crypto Market Cap, 1-Day Chart | Source: Total on TradingView.com
Featured image from iStock, Chart from TradingView.com