Ripple and the fight over the Hinman documents may prove to be an obstacle for U.S. SEC chairman Gary Gensler, who has called for a ban on the cryptocurrency community based on current laws and jurisprudence.
Redacted versions of all documents about the summary judgment were expected to be submitted by the SEC and Ripple yesterday. In this case, the deadline was met promptly by both sides. Further, filing (1) shows that the SEC is not yet prepared to make the Hinman records available to the general public.
The SEC is pleading with district judge Analisa Torres and threatening her in the petition, urging her not to release the records.
"The SEC respectfully maintains that the Hinman Speech Documents are protected by privilege. But if these documents were to become part of the public record, the SEC would be foreclosed from making any such argument in the future (on appeal in this litigation or in other litigation), which would be highly prejudicial to the SEC."
Will Ripple Become The SEC's Worst Nightmare?
According (2) to Jeremy Hogan, an attorney for the XRP community, the SEC is
"The SEC is STILL arguing that the Hinman emails are privileged despite losing that issue about 100 times already. Blows my mind. AND makes me recurious (is that a word?) about what is in them.”
Bill Morgan, another local attorney, highlights the danger posed by the SEC. The SEC claims that Hinman has the right to challenge the summary judgment decision, so Torres does not have permission to release the relevant records.
In the end, the government contends that it did not waive its privilege against the public by turning over the emails to Ripple as directed. Considering the court's ruling, "I do not know how the SEC can argue that it did not waive the privilege," Morgan said.
The lawyer further argued that no privilege could be forfeited because of the court's ruling. However, Morgan acknowledges the SEC's position has merit because the SEC can appeal. There is still a question of privacy that has not been answered here.
According to Morgan, "res judicata" is more important than the precedent value of the case's decision.
Despite this, the SEC's announcement makes it abundantly obvious that Hinman is the agency's top priority in its "law by enforcement" strategy. At this moment, any success for Ripple could be considered a success for the entire cryptocurrency sector.
After months of litigation, Judge Torres ruled in late September that Ripple Labs must be given access to the Hinman records. Written by William Hinman, a former director of the SEC's Corporation Finance Division, the materials mostly pertain to a lecture the executive delivered at the 2018 Yahoo Finance All Markets Summit.
While speaking, Hinman emphasized that ETH is not a security. According to Ripple, the speech is crucial proof that the legal system for crypto in the U.S. is so murky that not even SEC staff understand it.
SEC would be "foreclosed from making any such argument in the future," reveals the huge consequences.