XRP Big Win: SEC Turns Over Hinman’s Documents to Ripple

Hinman stated in his speech that Ether (ETH) was not a security. Ripple Labs considers the speech a key piece of evidence.
The tensions between the cryptocurrency giant Ripple (XRP) and the securities and exchange commission (SEC) escalate.

Ripple gets a boost

After nearly two years of dispute, Judge Torres orders the SEC to hand over Hinman documents, emails, and drafts related to Ripple labs litigation. In Hinman’s 2018 speech at the Yahoo markets summit, the former Director of the Securities and Exchange Commission declares Ether non-security. In reference to the official court order, the objection was overruled today in court by Judge Analisa Torres.

Ripple labs considers the speech by Hinman as a key piece of evidence. The arguments from both fronts have been valid but not enough to wind up the lawsuit thats making crypto history. In December 2020 the SEC filed a misguided lawsuit against Ripple labs alleging that Ripple conducted illegal security offering through the sales of XRP.

In his speech, Hinman proclaimed that Ether (ETH) has become sufficiently decentralized, hence in simple terms, ETH is not a security. Moving forward, the highly traded king of crypto, Bitcoin (BTC) is decentralized (is not a security). His statement is quite peculiar because that standard is nowhere to be found in the statuses that define securities in the SEC.

https://twitter.com/FilanLaw/status/1512470108291141633?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1512470108291141633%7Ctwgr%5E507587c56032b47a5fdfc8348ab793caa8f405d1%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fthecryptobasic.com%2F2022%2F04%2F08%2Fripple-v-sec-new-email-conversation-shows-william-hinman-violated-secs-rules%2F

Decentralized is not under any case under the law, in the three-part Howey test established in 1946 by the Supreme court. The test is used to determine whether a transaction qualifies as an investment contract or not. The four elements of the Howey test include the Investment of money, In a common enterprise, With the expectation of profit and to be derived from the efforts of others.

Hence, this is the basis that the SEC uses to decide whether an investment is a security. The SEC argues that Ripple does not meet the criteria of the Howey Test. The SEC countered the argument by claiming that the speech was Hinman’s personal opinion in order not to give ammunition to Ripple’s defense.

Before Hinman joined the SEC, he was a partner at Simpson Thacher & Bartlett and a member of the Enterprise Ethereum Alliance (EEA). The company was created to market Ethereum technology. It is worthy to note that Simpson paid Hinman a whooping $9 million in Profit sharing and retirement bonuses between 2017 and 2018 while he worked for the SEC.

Following a series of investigations of Hinman’s affiliation with Ethereum, it is believed that he had worked in the company’s interest which then resulted in to the 2018 controversial speech. The SEC maintained that the speech contained Hinman’s personal views, it would not have been relevant to Ripple if a junior employee had made it.

In Hinman’s emails, it is revealed that the former SEC executive had violated rules from the Commission. Hinman was specifically warned by Shira Minton, former SEC’s Ethics counsel, not to meet up with Simpson. He neglected all the warnings and had meetings with Simpson in four different occasions

XRP price finds bliss in the case

Ripple has enjoyed a surge in its price since its CEO appeared on FOX Business to discuss the case. At the time of publishing, the XRP price is 0.4935$. In the last 24 hours, the price has had a 12.33% uplift. The trading volume is at $4,279,446,916. The case will set a precedent for the cryptocurrency industry. However, this latest development could see an official ruling possibly come sooner.