Ever since the SEC filed a lawsuit against Ripple Labs and its executive in December 2020, the crypto community has been waiting for the nature of XRP to be decided. The regulatory agency claims that Ripple violated securities laws by failing to register with it the sales of XRP.
Ripple’s lawyers have been arguing that the sales of XRP were compliant with the law and weren’t materially different from sales of the ETH by the operators of the Ethereum blockchain.
William Hinman’s [former director of the SEC’s division of corporate finance] speech from 2018 where he claimed that Ethereum ain’t security has been quite a pivotal part of the case. Using the same speech in their stride, the defendants have time and again asked the Commission to draw a line of distinction between the Ripple’s XRP and ETH. The judge has also deemed the speech to be very “relevant” to the case.
SEC v. Ripple: Clash of opinions
The latest court hearing was held on Tuesday to decide on the production of documents related to the Hinman speech. Judge Netburn reminded the SEC that his speech was his personal views and not the views of the SEC, and then questioned if they still stood by that statement today.
Per CryptoLawUS’ thread on the hearing,
SEC doesn’t answer Judge Netburn’s question in its reply, but says even if it was his personal views, “he still sought legal counsel about the legal issues he encountered in that speech.”
The thread also highlighted,
Netburn appears to be saying that the SEC’s arguments are illogical, citing a “tension” in its position and reasoning.
People who had dialed in to listen to the hearing also opined that the SEC attorney was clueless about what was being argued. In a rather embarrassing way, the SEC stuck to the fact that the speech wasn’t relevant to the case.
On Ripple’s part, Solomon contended that the SEC was changing its views on Hinman’s speech being his personal views to suit their interests in this case. CryptoLawUS brought to light,
Solomon, with some irritation, reminds the court that “individuals have been sued here, and their reputations are under threat.” He says the facts are clear: “They WERE his personal views. He said that under oath. They didn’t ‘end up’ being his personal views. They WERE.”
After both the parties made their case, judge Netburn adjourned the hearing. She appreciated the presence of the parties, and said that she’d review all the documents and added,
“I will get to my ruling as soon as I am able.”
Community Reactions
At this point, the case seems to be more like a one-man show, with the man being Hinman. The ruling by Judge Netburn would prove to be a crucial turning point, and per people from the community, Ripple is easily going to score a point.
A particular listener, after highlighting that the SEC lawyer was stuttering, went on to state that it’s going to be an “easy W” for Ripple.
Attorney Jeremy Hogan indirectly hinted that the pendulum was oscillating in Ripple’s favor and tweeted,
“You don’t need a law degree to know how that court hearing went. ? But it’s even worse than it sounded. The SEC took a big step backwards on a key issue.“
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