On December 22, 2020, the SEC filed a lawsuit against Ripple, claiming that the company's sale of XRP constituted an unregistered securities offering.
Hinman Documents Released in SEC Ripple Case
On December 22, 2020, the SEC filed a lawsuit against Ripple, claiming that the company's sale of XRP constituted an unregistered securities offering. The SEC's charges also named Ripple's co-founder and former CEO Chris Larsen, as well as its current CEO Brad Garlinghouse.
In recent developments on the case, Ripple requested the “Hinman documents” in discovery, which were granted on Oct. 21, 2022. The SEC has tried to keep the documents sealed, arguing that they are irrelevant to the case, but on May 16, Judge Torres ruled that they are subject to public access and denied the SEC's motion to seal.
The "Hinman documents" are related to a speech given by former SEC Director William Hinman in 2018, where he stated:
“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 speech was significant as it suggested that cryptocurrencies could transition from securities to commodities. This ruling could affect Ripple's fair notice defense, and a summary judgment ruling could be issued soon. The outcome would have a significant impact on the future of cryptocurrency regulations.
