XRP Lawsuit: Judge Denies SEC Motion To Keep Hinman Documents Private

July 14, 2022 5:25 pm Comments

For the latest development in the lawsuit between the SEC and Ripple, a US judge just denied the SEC’s claim to use the attorney client privilege to protect the Hinman speech documents.

This counts as a major blow to the SEC’s position as the documents may likely contain information that would damage the SEC’s claim that XRP is considered a security.

Judge Sarah Netburn also called out the hypocrisy of the SEC’s claim where the agency stated that the speech was Hinman’s personal opinion, but also claimed that it was protected by the attorney client privilege.

Essentially, it must be one or the other, but both claims cannot be true at the same time.

CoinTelegraph shares the details of Judge Netburn’s decision:

“The hypocrisy in arguing to the Court, on the one hand, that the Speech is not relevant to the market’s 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.”

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

The SEC sued blockchain firm Ripple in late 2020 on allegations that senior executives Brad Garlinghouse and Christian Larsen sold Ripple’s XRP tokens as unregistered securities.

To conclude the ruling, it is stated that the documents must be produced now which may quickly accelerate the speed of the lawsuit assuming that there are no additional delays.

Speculators are now calling this a major tactical win for Ripple despite the fact that the SEC will likely appeal this decision,

Still, John Deaton shared his thoughts on this and stated that he was confident that the appeal judge will also side with Judge Netburn’s ruling.

This will likely come within the next 30 days, but it would be a small price to pay it could mean that this would finally help confirm that XRP is not considered a security.

CoinTelegraph concludes:

The SEC continues to insist that Hinman’s speech was a “purely personal errand” that was not meant to offer legal advice.

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:

“It was only in the context of his employment that he was able to solicit the edits and feedback he did.”
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.

The entire crypto industry will likely be affected by the outcome here, but it looks like Ripple is consistent in maintaining its strong defense.

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