In June 2018, former SEC Division Director William Hinman made headlines when he declared that ether, the cryptocurrency built upon the Ethereum blockchain, was not considered a security. This announcement significantly influenced the future of the cryptocurrency as a whole. However, newly released court documents seem to suggest that Hinman and other SEC officials may have experienced some internal pressure regarding their views on the matter.
The SEC released hundreds of relevant documents, including email communications and notes, as part of the ongoing legal battle between Ripple and the securities regulator. These documents shed light on the conversations that took place between Hinman and other SEC staff members ahead of his famous speech.
For example, it has been revealed that the original language used by Hinman in his speech to describe ether was deemed “vague” by Brett Redfearn, the director of trading and markets at the time. Redfearn encouraged the use of stronger language, and various Google Document comments from unnamed editors also urged for more clarity on whether a digital asset meets the legal standards of a security.
This release of the Hinman emails has sparked excitement among XRP investors, as it showcases the inner workings of the SEC as they decide whether specific cryptocurrencies, like Ripple’s XRP, should be considered a security or a commodity. If anything were found suggesting that Hinman and the SEC were promoting or protecting ether over other tokens, such as XRP, it could be seen as a significant win for Ripple in their ongoing legal battle with the regulator. However, it’s essential to exercise caution and recognize that Hinman’s speech never explicitly mentioned Ripple or any other cryptocurrencies outside of bitcoin and ether.
The ongoing Ripple v. SEC case raises questions surrounding the SEC’s definition and treatment of “crypto security.” While it’s tempting to view Hinman’s approach to Ethereum as potentially being applicable to XRP, one must not underestimate the key differences between the two blockchain technologies. Ether and XRP differ in terms of validator counts, use cases, and their relationship with corporate support.
As this legal battle unfolds, it’s crucial to remain aware of the complex nuances separating various cryptocurrencies and acknowledge that regulatory decisions can’t be made based on simple comparisons alone. The future of Ripple and other digital assets hang in the balance, so understanding these distinctions – and recognizing that what worked for Ethereum may not work for others – is vital.
Source: Blockworks
