Ripple found out about an email chain between the SEC and a third party that could prove Hinman’s 2018 speech was not merely a personal opinion, but the SEC’s policy. The Judge wants to take a look at it.
At the center of the debate is ex-SEC Director William Hinman, who gave a famous speech in 2018 stating Ethereum is not a security, which prompted the price of ETH to skyrocket.
Ripple’s legal team has recently detected descriptions from the SEC’s privilege log which suggest they may be highly relevant to this case.
One, in particular, is an email chain “concerning discussions with a third party whom Defendants understand received guidance from the SEC to analyze its digital asset under the framework set forth in Director William Hinman’s June 14, 2018 speech”.
“The SEC sent an email to a third party telling them to analyze a digital asset using the factors in the Hinman speech; which speech was just his personal opinion. I understand now – it’s the SEC that needs clarity!”, attorney Jeremy Hogan commented at the time, pointing out the agency’s contradictions.
The document could explicitly prove Hinman’s speech was not merely a personal opinion, but the SEC’s official policy. This has been a key issue in the lawsuit.
Furthermore, if the Judge confirms that the SEC spent all this time insisting the speech was merely Hinman’s personal opinion while providing guidance based on that speech, the SEC will likely be in a bad place throughout the rest of the lawsuit.
The breaking news here is that Judge Sarah Netburn has ruled in favor of Ripple’s request and will be adding the documents and the email chain to the in camera review.
“Defendants’ request is GRANTED. The SEC shall submit the two documents related to the SEC’s meetings with law firms and the email chain for in camera review, along with a submission explaining its privilege assertions for each of those documents, no later than October 15, 2021. The SEC shall file a redacted version of its submission on the public
docket. Defendants’ response is due no later than October 22, 2021. SO ORDERED.”
When will the Judge complete the review and rule on the SEC’s deliberative privilege process issue, it is unknown, but Ripple has recently filed a revised response on the matter.
The Defendants, led by attorney Matthew C. Solomon, are making the point that no Deliberative Process Privilege (DPP) exists because the Securities and Exchange Commission has never deliberated about policy regarding digital assets.
Ripple’s attorneys are placing the SEC between two options:
– Its officials’ views on digital assets – including Hinman’s speech – are only personal opinions, which means there is no Deliberative Process Privilege case to be made;
– Its officials’ views were policy, there is a DPP case to be made, but Hinman’s speech and other officials’ views can be used as evidence against the SEC in the lawsuit.
It also seems that a memorandum by the SEC’s Division of Corporation Finance relating to a “legal analysis of XRP” circulated amongst certain SEC individuals on June 13th, the day before Hinman’s speech.
Judge Sarah Netburn will be the one making the ruling regarding the privilege issue, but the SEC has already been ordered to hand over many of those documents to Ripple’s attorney and despite the Judge’s orders, the agency refused to do so.
This is the SEC’s last chance and it looks quite bleak for the financial watchdog.
There’s more on Ripple:
- Ripple calls negligence as SEC seeks $1.38 billion from XRP lawsuit
- Ripple lawsuit raises hopes as ‘Crypto Mom’ condemns SEC policy
- SEC v. Ripple: XRP Holders score “huge win” with Amicus Curiae status
- SEC pushes back against Ripple’s “flawed search” of evidence on XRP
- Ripple running out of time as BIS ‘conspires’ to end cryptos’ threat to financial system
- SEC v. Ripple: XRP’s utility and currency value backed by former U.S. Treasurer
- Ripple pushes SEC up against the wall: “If personal opinions, then no privilege”
- Ripple buries SEC in paperwork in XRP lawsuit: Nearly 30,000 requests
- Ripple responds to Senator Toomey on XRP, the SEC, and how to do better