Judge orders SEC to release Hinman documents in XRP case

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A federal judge has ordered the SEC to release documents in its legal battle with Ripple, calling the agency’s repeated refusal to do so “hypocrisy”. It’s an apparent victory for Ripple in the ongoing fight over whether the XRP cryptocurrency it uses for payments is a security.


U.S. Magistrate Judge Sarah Netburn ordered the SEC to produce internal documents related to former manager William Hinman’s 2018 speech, in which he claimed ether was not a security.

The SEC had refused to comply with the order, arguing it would be a violation of ‘attorney-client privilege’, saying Hinman, who resigned in 2020, had contacted SEC staff ‘for their legal advice’ .

The SEC had also argued that Hinman’s comments did not reflect the agency’s policy stance.

Judge slams SEC for making what has become a major issue in his legal tussle with Ripple, which he accused of failing to register $1.4 billion worth of XRP as securities, “unnecessarily complicated” by his “litigation tactics”.

“The hypocrisy of arguing in court, on the one hand, that the speech is irrelevant to the market’s understanding of how the SEC will regulate cryptocurrency, and on the other hand, that Hinman has sought and received legal advice from SEC counsel in writing his speech, suggests that the SEC adopts its litigation positions to achieve its desired goal, and not out of staunch allegiance to the law,” wrote Netburn.

The documents, which presumably include comments from SEC staff on Hinman’s draft speech, have become critical of the case given the regulator’s allegation that Ripple executives “were objectively reckless in believing that XRP did not ‘was not a title’ and that in fact the company was on ‘reasonable notice’ that it was, the judge wrote.

The SEC declined to comment.

Marc Fagel, former SEC regional director in San Francisco, said the case was “unusual” given how the court “placed these internal deliberations squarely at issue.”

“The SEC generally seeks broad protection for its internal deliberations,” he told Protocol. “In theory, this encourages SEC staff — who themselves cannot set policy — to speak freely among themselves without worrying about tying the SEC to a position it has not officially taken.”

Ripple’s battle with the SEC, which is expected to drag on until early next year, has become a closely watched affair given its potentially far-reaching consequences for the crypto industry.

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