{"id":12175,"date":"2022-07-13T06:09:02","date_gmt":"2022-07-13T06:09:02","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/hypocrisy-judge-denies-sec-motion-to-keep-hinman-docs-secret-in-ripple-case\/"},"modified":"2022-07-13T06:09:04","modified_gmt":"2022-07-13T06:09:04","slug":"hypocrisy-judge-denies-sec-motion-to-keep-hinman-docs-secret-in-ripple-case","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/hypocrisy-judge-denies-sec-motion-to-keep-hinman-docs-secret-in-ripple-case\/","title":{"rendered":"\u2018Hypocrisy\u2019: Judge denies SEC motion to keep Hinman docs secret in Ripple case"},"content":{"rendered":"

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The Securities and Exchange Commission (SEC) has suffered a blow in its case against Ripple, after a U.S. judge has denied its claims for attorney-client privilege regarding internal documents related to the \u201cHinman speech\u201d.<\/p>\n

In denying the motion on July 12, U.S. Magistrate Judge Sarah Netburn called out the SEC\u2019s hypocrisy in arguing that the speech \u2014 in which a former official Bill Hinman suggested ETH was not a security \u2014 was a personal matter for Hinman while also claiming it should be protected because he received legal advice from the SEC to confirm the commission\u2019s policies. <\/p>\n

\u201cThe hypocrisy in arguing to the Court, on the one hand, that the Speech is not relevant to the market\u2019s understanding of how or whether the SEC will regulate cryptocurrency, and on the other hand, that Hinman sought and obtained legal advice from SEC counsel in drafting his Speech, suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law.\u201d<\/p><\/blockquote>\n

The draft of the Hinman speech, which the SEC has fought to keep under wraps, has been seen by many in the XRP community as a pivotal piece of evidence that could work in favor of Ripple Labs. <\/p>\n

The SEC sued blockchain firm Ripple in late 2020 on allegations that senior executives Brad Garlinghouse and Christian Larsen sold Ripple\u2019s XRP tokens as unregistered securities. <\/p>\n

However, Ripple has argued that the speech made by former director of the Division of Corporation Finance Bill Hinman in 2018 stated that Ether (ETH) did not constitute \u201csecurities transactions\u201d \u2014 contradicted to the SEC\u2019s stance on the matter. <\/p>\n

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This was not even a nuanced opinion. Judge Netburn tore apart every SEC argument for attorney-client privilege of the Hinman emails.<\/p>\n

That starts the 14 day clock for an appeal to Judge Torres. And if her recent Orders are any precedent, things will move relatively fast. https:\/\/t.co\/7k6KJx4Lea<\/p>\n

\u2014 Jeremy Hogan (@attorneyjeremy1) July 12, 2022<\/a><\/p><\/blockquote>\n

Barring any further appeals or delays, the ruling states that: \u201cThe documents must be produced.\u201d<\/p>\n

Related: <\/em><\/strong>Class action lawsuit claims Solana\u2019s SOL is an unregistered security<\/em><\/strong><\/p>\n

Delphi Digital\u2019s general counsel Gabriel Shapiro called it a \u201cbig tactical win for Ripple\u201d in a July 12 tweet.<\/p>\n

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wow. big tactical win for Ripple. https:\/\/t.co\/oS4HRO1u2x<\/p>\n

\u2014 _gabrielShapir0 (@lex_node) July 13, 2022<\/a><\/p><\/blockquote>\n

Some believe that an appeal by the SEC is likely. Founder of crypto legal news outlet Crypto-Law John E Deaton told his 205,000 followers on July 12 that the appeal, along with Ripple\u2019s objection, would come within 30 days. He also believes the appeals judge will side with Judge Netburn’s recent ruling. <\/p>\n

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If there are no extensions granted, Judge Torres will have the SEC\u2019s appeal and Ripple\u2019s objection to the appeal in 30
Days. After Judge Torres upholds Judge Netburn\u2019s decision, the SEC can ask Judge Torres to certify an appeal to the 2nd Circuit. She is likely to deny doing so. https:\/\/t.co\/HtMjbjk2OK<\/p>\n

\u2014 John E Deaton (205K Followers Beware Imposters) (@JohnEDeaton1) July 13, 2022<\/a><\/p><\/blockquote>\n

The SEC continues to insist that Hinman\u2019s speech was a \u201cpurely personal errand\u201d that was not meant to offer legal advice. <\/p>\n

Judge Netburn acknowledged that this could potentially protect the drafts if Hinman were a private citizen. However, Judge Netburn wrote that the commission also argued Hinman would not have had access to the information and resources if he were not already working at the SEC. <\/p>\n

\u201cIt was only in the context of his employment that he was able to solicit the edits and feedback he did.\u201d<\/p><\/blockquote>\n

If the contents of the speech documents are compelling enough, it could be a tipping point for Ripple in the case, which has been seen as potentially setting a precedent for other similar crypto token issuers.<\/p>\n