In a significant development in the legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), Ripple CEO Brad Garlinghouse hailed a recent ruling by a federal judge as a “win for transparency.” The ruling prevents the SEC from sealing documents connected to a 2018 speech by former official William Hinman, which is vital to Ripple’s defence.
The ongoing lawsuit, which began in December 2020, centres around allegations that Ripple raised over $1.3 billion through an unregistered digital asset securities offering involving its cryptocurrency, XRP.
The documents at the centre of the dispute, known as the “Hinman Speech Documents,” were ordered to be handed over to Ripple as part of the discovery process in January 2022.
In January 2022, Magistrate Judge Sarah Netburn initially ordered the release of the Hinman Speech Documents, and District Judge Analisa Torres of the U.S. District Court for the Southern District of New York recently concurred with this decision.
Judge Torres ruled that the documents should not be sealed, allowing for transparency in the proceedings. However, she granted the SEC the ability to redact personal information of individuals mentioned in the documents.
Judge Torres justified her ruling by stating that the documents were “not protected by the deliberative process privilege” as they did not relate to an agency position, decision, or policy. She emphasised the importance of maintaining openness and candour within the agency, while also highlighting the strong presumption of public access.
While the SEC attempted to seal the documents, Ripple also sought to redact certain information, such as financial details and contractual agreements. Judge Torres approved many of Ripple’s proposed redactions, acknowledging their specific and targeted nature. However, she deemed some of the redactions requested by Ripple as “overbroad,” particularly those related to XRP.
The ruling is a significant victory for Ripple, as the Hinman Speech Documents hold substantial importance for their defence. In the speech, William Hinman expressed his opinion that Ether, the cryptocurrency associated with the Ethereum blockchain, should not be classified as a security. Ripple aims to leverage this statement to support its position regarding XRP’s status.
As the lawsuit between Ripple and the SEC continues, this ruling underscores the court’s commitment to maintaining transparency in the proceedings. The unsealing of the Hinman Speech Documents offers valuable insights into the SEC’s views on cryptocurrencies and may have far-reaching implications for the broader crypto industry.
