This is a new battle won by the Ripple company in its legal dispute with the Securities and Exchange Commission (SEC). With the revelation of the Hinman documents, the company led by Brad Garlinghouse proves the legal vagueness that the SEC maintains on the laws to apply to cryptocurrencies such as XRP and Ether (ETH).
SEC releases Hinman documents
After many months of patience, Ripple finally won a battle with the Securities and Exchange Commission (SEC). Recently, the American institution publicly revealed new documents concerning William Hinman, a former director of the SEC working in the department dedicated to corporate finance.
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As part of the trial confronting the XRP issuer and the SEC, these files reveal email exchanges between Hinman and the regulatory institution during a speech to be prepared. Produced in 2018, Hinman addressed in particular the question of the regulation of cryptocurrencies :
1/ It’s been 5 years since Bill Hinman gave his infamous speech – and through the SEC’s lawsuit against @Ripple (and 7 court orders), we can finally share what happened behind the scenes through the now public emails / drafts of the speech. pic.twitter.com/sx2TpW0TYe
— Stuart Alderoty (@s_alderoty) June 13, 2023
” It’s been 5 years since Hinman gave his infamous speech – and thanks to the SEC’s lawsuit against Ripple, we can finally share what happened behind the scenes through the now publicly available emails and drafts of the speech. »
According to these e-mail exchanges, Hinman suggested that Bitcoin (BTC) and Ether (ETH) should not be considered “securities”, a term designating transferable securities. However, on the drafts of the speech, the SEC asked Hinman not to rule on the regulation to follow for ETH:
” We still have reservations about including a statement directly about Ether in the speech. Even with the in-sentence caveats, it seems like it would be hard for the agency to take a different stance on Ether going forward. »
Despite these revelations and the crypto community’s interest in these documents, the reaction of XRP is still awaited. Since June 13, when the information was made public, Ripple’s cryptocurrency has seen a drop of around 10%, from $0.52 to $0.47.
However, note that the entire market has fallen over the past 24 hours, in response to the latest Fed statements. Thus, it is difficult to know the real impact of the Hinman documents on the price of XRP.
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Ripple vs. the SEC: a dragging showdown
It has now been two and a half years since the SEC sued Ripple. The reason ? According to US authorities, Ripple has made a sale of unregistered securities for a total sum of $1.38 billion in XRP.
In reality, the problem is the following: Ripple and the SEC do not have the same definition of the regulation that should apply to XRP. According to Ripple, this cryptocurrency cannot be considered a financial security.
However, since a fundraising was carried out to sell XRP and that a majority of them were held by the company and its founders, the SEC considers that this cryptocurrency must follow the regulations in force on financial securities.
In addition, the American institution also attacked the CEO of Ripple, Brad Garlinghouse, as well as the co-founder Chris Larsen. According to her, they have recovered $600 million from the sale of XRP without registering their personal operations.
Today, Ripple is no longer the only company in the industry being sued by the SEC. Last week, the Coinbase and Binance exchange platforms were attacked by the American regulator for the unregistered sale of around ten cryptocurrencies considered as financial securities, such as MATIC, SOL and ADA.
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Source: SEC
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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