A proposal by the SEC not to use records of its internal discussions following the pro-Ethereum speech by its former director, William Hinman, has been rejected, a development that has been seen as a victory for the Ripple and cryptocurrency community.
In the controversial June 2018 speech, the former US Securities and Exchange Commission director stated that ETH, the blockchain currency of Ethereum, is not a movable asset.
This statement is exactly contrary to the SEC’s current position, which considers ETH as a movable asset and not a commodity.
The SEC’s main argument and why it was rejected
Recall that the SEC had filed a motion on December 22 to seal internal emails, text messages and expert reports following Hinman’s speech, arguing – among other arguments – that its mission trumps the “public’s right” to access documents that “have no relevance” to the court’s summary judgment.
However, Judge, Analisa Torres, of the US District Court, ruled that the documents are “court documents”, subject to a strong presumption of public access, as she argued the “Hinman Speech Documents” could affect the Court’s decision.
Judge Torres noted that the court also rejected the SEC’s argument that sealing the documents is necessary to maintain trust and candor within the SEC, stating:
“Hinman’s speech documents are not protected by the deliberative process privilege because they do not relate to an SEC position, decision or policy.”
The court’s other decisions
While the court ruled that Hinman’s speech documents would be made public, it granted the SEC’s other two requests, to correct the names and identifying information of SEC experts and XRP investors, as well as personal and financial information of the defendants.
The court also denied certain motions for sealing on Ripple’s part, including reports linking Ripple’s revenues to XRP sales and the amount of compensation offered to trading platforms.
It got what it wanted
Ripple considers Hinman’s speech key evidence in its ongoing legal battle with the SEC, which claims that Ripple’s XRP sales of Ripple’s XRP violated US securities laws.
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