SEC Vs Ripple Case is Now Turning Towards Hinman Documents to be Unsealed

Following a speech by former director William Hinman, the US Securities and Exchange Commission and Ripple have asked for a one-week postponement on unsealing internal discussions.

The SEC and Ripple allegedly filed a request on Friday to extend the deadline for the submission of various evidence, including the Hinman documents.

SEC and Hinman's Documents, What's the Relation?

The "Hinman documents" refer to a speech delivered by former SEC Director William Hinman in 2018 and the documents linked with its preparation.

Hinman stated in his lecture that Ethereum should not be regarded as a security because of its decentralised character, stating:

“Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.”

This may have an impact on Ripple's fair notice defence, which may be used if Judge Analisa Torres concludes that Ripple (XRP) did, in fact, offer unregistered securities.

Later on, District Judge Analisa Torres of the United States District Court for the Southern District of New York approved the request, establishing June 13th as the new date, according to James Filan, a defence attorney and former federal prosecutor who has been carefully following the case.

The SEC and Ripple have filed a "Joint Letter requesting a one-week extension, until June 13, 2023, to file public, (redacted) versions of cross-motions for summary judgement and accompanying exhibits, which includes the Hinman materials." 

Hunt For the Hinman's Document

The records were sought in discovery by Ripple, and the request was granted on October 21, 2022. While the records might be used in Ripple's defence, the SEC has repeatedly fought to keep them sealed, claiming that they are irrelevant to the court's summary judgement ruling.

Judge Torres, however, decided on May 16 that the Hinman records are "judicial documents" susceptible to a high presumption of public access and refused the SEC's application to seal.

CEO of Ripple Labs, Brad Garlinghouse shared a Tweet in which he stated that the Hinman documents consist of Emails and all the information will be publicly available soon.

Notably, the court did not indicate whether the records will be considered when it decides on each party's summary judgement requests; but, based on the statements of people who have seen the documents, it is probable that they will harm the SEC's public image.

There are also issues about whether Hinman had a conflict of interest while delivering the speech, given he worked for a legal firm that is a member of an Ethereum advocacy organisation before and after working for the SEC — and the records may provide further information on this.

Conclusion

The conclusion of the Ripple-SEC case will have far-reaching consequences for the entire crypto sector, and it may determine how cryptocurrency firms operate and are regulated in the future. It is worth mentioning that the SEC has also filed a lawsuit against certain other cryptocurrency firms.