Court Denies SEC’s Request to Seal Hinman Speech Documents in Ripple Lawsuit
- These documents are seen as central in Ripple’s battle against the SEC, which in 2020 accused the company of selling its XRP token without registering it as a security.
- The documents in question are internal emails, text messages, and expert reports that followed Hinman’s 2018 speech, in which he said ETH and BTC were not securities.
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In a significant win for Ripple, a federal judge has ruled against the U.S. Securities and Exchange Commission (SEC) in its motion to seal documents connected to a controversial speech on cryptocurrency.
The decision was made by District Judge Analisa Torres of the U.S. District Court for the Southern District of New York on 16 May, and refers to documents connected to a 2018 speech on cryptocurrency by former SEC Director of Corporation Finance Bill Hinman, in which he said that Ether (ETH) and Bitcoin (BTC) were not securities. These documents are considered central to Ripple’s battle against the SEC, which in 2020 accused the crypto company of unlawfully selling its XRP token without registering it as a security.
The regulator had sought to shield documents and communications — such as internal emails, text messages, and expert reports — that followed Hinman’s speech, arguing that they were protected under a law that granted privacy to internal deliberations. Judge Torres disagreed with the SEC, noting that the materials were “judicial documents” that should be subject to a strong presumption of public access. This ruling supports a previous decision by Magistrate Judge Sarah Netburn in January 2022, who had ordered the SEC to turn over the documents to Ripple as part of the discovery process. Ripple CEO Brad Garlinghouse took to Twitter to express his satisfaction with the court’s decision:
The unsealing of the Hinman speech documents is considered a significant development in Ripple’s ongoing legal battle with the SEC, as the company viewed the speech as a crucial piece of evidence to challenge the allegations made against the company.
While Judge Torres did allow certain redaction requested by the SEC — including personal information and financial details of individuals — she also deemed several proposed redactions by Ripple as “overbroad”. The company wanted to redact references that linked its revenues with XRP sales, as well as compensations that were offered to trading platforms for listing the asset. The judge argued that these specific details were pertinent to the case and should not be shielded from public scrutiny.
- The U.S. SEC claimed in its response that it was under no obligation to issue new regulations for crypto, and that rules for crypto were already published and were sufficient.
- The agency also tried to distance itself from any public comments made by its chair Gary Gensler, particularly regarding his statement that most cryptocurrencies are securities.
U.S. Securities and Exchange Commission building in Washington DC, October 12, 2018. Andriy Blokhin/Shutterstock
- The cryptocurrency exchange is estimated to have more than 100,000 creditors, and between $500 million and $1 billion in both assets and liabilities.
- The Chapter 11 filing came less than a month after the U.S. SEC filed charges against Bittrex and its former CEO, claiming they were operating an unregistered securities exchange.
- The U.S. Third Circuit Court of Appeals has filed a text-only order against the securities regulator, giving it 10 days to respond to Coinbase’s complaint.
- The crypto exchange filed a lawsuit against the SEC last week, requesting a response to a rulemaking petition it had filed back in July 2022.