Ripple Labs scored a victory in its continuing legal battle with the United States Securities and Exchange Commission (SEC) on Sept. 29 as U.S. District Court Judge Analisa Torres ruled to release the documents written by former SEC Corporation Finance Division Director William Hinman. The documents predominantly relate to a speech Hinman delivered at the Yahoo Finance All Markets Summit in June 2018.
Hinman stated in his speech that Ether (ETH) was not a security. Ripple Labs considers the speech a key piece of evidence the case the SEC has brought against it alleging that sales of Ripple’s XRP violated U.S. securities laws — though time has yet to tell whether the language used in the speech will be as meaningful as the company suggests. The circumstances surrounding the speech and Hinman’s actions leading up to it are a source of considerable confusion.
Judge Torres’ decision overruled SEC objections to releasing the documents following District Court Judge Sarah Netburn's order declaring that the emails and drafts of the speech were not protected by deliberative process privilege, as the SEC has claimed. The SEC then claimed attorney-client privilege over the documents, which was overruled by Netburn in July. Judge Torres’ ruling overruled the SEC’s objections to that decision.
The SEC filed suit against Ripple Labs and its current CEO, Brad Garlinghouse, and previous CEO Chris Larsen in December 2020, saying the company’s cryptocurrency, XRP, is a security because the company used it to raise funds in 2013. The case is a relatively rare example of an SEC action that goes to trial, thus potentially leading to a precedent-setting decision rather than ending in a settlement.
The case was initially seen as going badly for Ripple, and the company has pursued a variety of strategies to defend itself. Ripple Labs and the SEC filed motions on Sept. 17 for a summary judgment in the U.S. District Court for the Southern District of New York.