Judge rules Ripple can access SEC emails concerning a speech with an official who concluded Ethereum is not security so let’s read more in today’s Ripple news.
The ruling found that the SEC could not claim privilege over a speech related to Ethereum and this decision will help Ripple make the case that XRP is not a security. The judge rules in favor of Ripple and now the company has a small victory in the battle with the SEC as the judge said the agency can’t claim that emails concerning a landmark 2018 speech about ETH are privileged documents. The speech in question was delivered by top SEC official William Hinman who told the audience that Ethereum was not a security because it is decentralized.
That speech became the main court case where the SEC argued that Ripple and its executives knew the blockchain’s digital currency and that XRP was a security that needed to be registered with the agency but sold to the public anyway. As a part of its legal strategy, Ripple wanted to obtain more evidence about how Hinman decided Ethereum was not security which is more evidence that could help the company rebuff the SEC claims about the nature of XRP. This also concerns a larger batch of documents including nodes by the SEC crypto expert Valerie Szczepanik about many SEC deliberations as well as emails where Hinman and others discussed a draft of the ETH speech.
The SEC argued that the documents were only subject to privilege for a legal team which means the party doesn’t have to share them with the opponents in litigation. The SEC invoked attorney-client privilege as well as other forms of privilege designed to shield the government agencies in different situations. The US Magistrate JudgeSarah Netburn agreed with the SEC on some documents but rejected the argument for a dozen of batches of documents. In the case of the Hinman speech, Netburn concluded that the privilege didn’t apply because the speech concerned his personal views and not the ones of the agency:
“Although Hinman and the SEC admit that agency staff discussed his speech, it appears that this speech was ‘merely peripheral to actual policy formation,’ Tigue, 312 F.3d at 80, and not an ‘essential link’ in the SEC’s deliberative process with respect to Ether, Grand Cent. P’ship, 166 F.3d at 482. Accordingly, emails concerning the speech or draft versions are neither predecisional nor deliberative agency documents entitled to protection.”
Netburn’s decision will provide Ripple with some ammunition to use in the legal case but also in the court of public opinion where many believe the SEC has been harsh on the company. The ruling is only procedural however and doesn’t have a bearing on the bigger issue in the case.
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