Judge Torres considers the speech by William Hinman could allow obtaining potential impeachment evidence or accusing witnesses at trial. Meanwhile, Judge Netburn ruled that the statements by the former executive about the status of cryptocurrencies as securities were his thoughts, not those of the SEC.
Judge Analisa Torres ordered the SEC to deliver documents from a speech given by William Hinman in 2018. That ruling regarding the former SEC Director of the Division of Corporate Finance allowed Ripple Labs to score a crucial victory.
That happened after a lengthy legal battle that might help determine the fate of many crypto assets.
A previous ruling by Judge Sarah Netburn stated the due process privilege did not protect e-mails and drafts related to the former director. Although the SEC requested clarification and reconsideration of the ruling, Judge Netburn denied it and upheld the clarification motion. A due process privilege is a confidential discussion leading to the announcement of government or policy changes.
After the SEC reiterated its PLR argument, Judge Netburn ordered them to hand over the documents. Then the government agency filed objections to the orders, which Judge Torres overturned.
That forces the SEC to seek documents from the speech of William Hinman in 2018. At the time, the former director said the Ethereum network, cryptocurrencies, and trading do not relate to securities.
Regarding the Ethereum network and its decentralized structure, he pointed out that the offers and sales of Ether are not securities transactions.
The problem with the statements of William Hinman relates more to an SEC lawsuit against Ripple Labs in 2020. The legal process included its former CEO, Chris Larsen, and its current CEO, Brad Garlinghouse. The SEC claimed that the company and the two executives have profited from the illegal sale of XRP as an unregistered security.
Judge Torres Confirms the Previous Court Sentences regarding Ripple
According to Judge Torre, the documents from the speech given by Hinman in 2018 speech were relevant to the case. She said they could allow obtaining potential impeachment evidence or accusing witnesses at trial, including Hinman. Unconvinced that Judge Netburn wrongly ruled that the documents were pertinent to the case, Judge Torres overturned the first objection of the SEC.
Judge Netburn ruled that the speech of William Hinman on the status of cryptocurrencies as securities were his thoughts, not those of the SEC. Since the DPP did not protect them, Judge Torres dismissed the objections of the SEC to this ruling.
Judge Torres agreed with the evaluation of the content of the documents by Judge Netburn, saying it was not legal advice about future or past conduct.
One Step toward Clearer Guidelines for the Cryptocurrency Industry
Ripple and its two executives score a crucial victory thanks to the order to the SEC by the judge. That situation potentially brings them one step closer to dismissing the nearly two-year lawsuit.
The finding is relevant to the future characterization of cryptocurrencies, which the industry has watched closely.
XRP is trading at USD 0.487512 and has accumulated a 3.6% gain over the last week. While its daily trading volume is above USD 3.38 billion, its market capitalization is about USD 24.31 billion, according to CoinGecko.
While the price of XRP is still down 85% from its all-time high, Ripple blames the SEC lawsuit for hoarding coins.
By Alexander Salazar
