Ripple Labs and the U.S. Securities and Exchange Commission (SEC) appear to agree on one aspect regarding the Hinman Emails: the former SEC official’s past comments should not dictate current policy. Although the emails have drawn attention, they highlight that the SEC’s past uncertainty over the status of ether (ETH) never resulted in formal rules or guidance.
Andrew Hinkes, a lawyer at K&L Gates who co-chairs its digital assets practice, suggests that while the emails offer a snapshot of the SEC staff’s views at a certain time, the agency cannot be held to these opinions as they do not create precedent or establish law.
William Hinman, the former head of the SEC’s corporation finance division, had said in a speech that he didn’t “see a need to regulate ether.” This perspective has been particularly scrutinized by Ripple, considering the parallels between ETH and the XRP token closely linked to Ripple’s business.
Ripple’s Chief Legal Officer, Stuart Alderoty, believes that Hinman’s speech should no longer be used in discussions about whether a token is a security. It seems the SEC agrees, as the agency hasn’t relied on Hinman’s position in recent years. Instead, the SEC has shifted towards remarks made by SEC Chair Gary Gensler, who stated that tokens tied to proof-of-stake platforms may be considered securities, although he did not mention ETH specifically.
However, until the SEC’s five commissioners create a new rule, issue guidance, or bring an enforcement action explicitly declaring that ETH is a security, the debates surrounding Hinman’s speech have no legal bearing. Ripple, entangled in a legal battle with the regulator over whether the XRP token is a security, would like an investigation into Hinman’s comments. Alderoty argues that the SEC has weaponized Hinman’s speech to bring a series of enforcement actions and disrupt the crypto economy in the United States.
Despite Ripple’s determination to keep the emails in the spotlight, some experts are skeptical about their ability to impact the broader conversation on crypto regulation in the U.S. Grant Gulovsen, an Illinois-based lawyer working with crypto clients, doesn’t believe the Hinman emails hold significant legal value and questions how they could help Ripple/XRP. Furthermore, if the SEC no longer considers Hinman’s speech applicable, it may not bode well for crypto in general.
In conclusion, while the exchanges in the Hinman emails provide insight into the thoughts of certain SEC staff at that time, they do not create precedent or establish law. The ongoing debate about crypto regulation in the United States will not be swayed by these emails, but rather by clear action taken by the SEC’s commissioners in the form of new rules or guidance.
Source: Coindesk
