The Ripple vs. SEC case continues and another significant victory for the XRP coin issuer. Could it be that the win is getting closer?
SEC application rejection
In the last material on the battle fought between Ripple and the SEC, titled “SEC vs. Ripple: Another document proves XRP is not a security”, we reported on Perkins Coie’s opinion submitted to the then Director of the Division of Corporation Finance on behalf of the SEC, William Hinman. The document was a sort of legal advice to Ripple, which was supposed to be of interest to the official himself at the time. Three months later, there was a speech he gave at a conference in San Francisco in which Hinman stated (presumably based on this information) that Bitcoin and Ether are not securities. However, the SEC distances itself from his statement by suggesting that it was merely a meaningless private opinion. Interestingly, the court shows a slightly different attitude here.
Judge Sarah Netburn ordered the SEC to include among the trial documents an email with a draft of Hinman’s speech on Bitcoin and Ethereum. The Securities and Exchange Commission’s argument here was that such documents are protected by DPP (deliberate process privilege) because Hinman’s speech reflects the office’s policy. DPP is a form of exemption for the government from disclosing certain documents in a case. This is to ensure their confidentiality. However, the judge found that the views of officials are not protected by such a privilege. She also found that the emails “were neither pre-decisional nor deliberate.”
Because SEC officials express varying views on Hinman’s statements depending on the situation, Judge Netburn wrote in her decision:
“The SEC tries to have it both ways, but the speech was either intended to reflect agency policy or it did not. By insisting that the speech reflected Hinman’s personal views, the SEC cannot now reject its own position.”
Former federal prosecutor James K. Filan says this is a very big win for Ripple.
For now, the SEC has a chance to appeal this decision. There are two weeks to do so. Otherwise, Ripple will have a very strong argument on its side, which it has been fighting for a long time and which may speed up the road to the end of the process.