The highly anticipated contents of former Securities and Exchange Commission (SEC) director William Hinman’s emails were recently shared with the public following Ripple’s ongoing lawsuit against the SEC. While many were hoping for a “smoking gun” that could change the course of accusations towards Ripple, it appears the released emails reveal little in terms of new and valuable information.
Hinman’s emails pertain to a June 14, 2018, speech in which he stated that assets like Bitcoin and Ethereum should not be considered securities. This statement drew significant attention, as the emails were expected to demonstrate the SEC’s bias towards Bitcoin and Ethereum. However, legal experts remain skeptical about whether these emails would aid in Ripple’s defense.
While not particularly helpful from a legal standpoint, experts believe these emails may serve to fuel public support for changes in cryptocurrency regulations. Austin Campbell, a managing partner at Zero Knowledge Consulting, stated they reveal the SEC’s actions against cryptocurrencies are not deserving of the benefit of the doubt. Gabriel Shapiro, general counsel for Delphi Labs, called the emails a “nothingburger” that fails to offer anything new to Ripple’s case.
Ripple Labs CEO Brad Garlinghouse expressed his disbelief in a Twitter thread, stating that it was “absolutely unconscionable” for Hinman to proceed with his speech, despite pushback from the Commission’s staff. He called the SEC’s actions against Ripple Labs and its founders even more troubling, as their Division Head “deliberately created confusion” about the matter.
The released emails primarily consist of back-and-forths between Hinman and SEC staff in the week leading up to Hinman’s Yahoo Finance All Markets Summit speech. Exchanges included concerns about disclosing Bitcoin as a security and how it would affect future SEC actions, as well as suggestions to clarify the SEC’s views on the Howey Test.
An early draft of Hinman’s speech from May 24 showed that he believed federal securities laws’ disclosure requirements did not apply to Bitcoin or Ether. However, in a June 4 draft, comments made by a staff member suggested that phrasing surrounding Ether would be decided upon after meeting with Ethereum co-founder Vitalik Buterin and the Ethereum Foundation.
Ripple’s lawyers have been fighting for months to access Hinman’s emails, hoping they would aid in their defense against the December 2020 lawsuit accusing them of selling unregistered securities. Following their public release, the price of XRP briefly jumped before ultimately falling to $0.51 at the time of writing.
Overall, while the release of Hinman’s emails may not provide Ripple with a clear-cut legal advantage, the fact that they have made it into the public domain could potentially serve to amplify calls for regulatory changes in the rapidly evolving cryptocurrency landscape.
Source: Decrypt
