The end of Ripple Labs’s legal battle with the U.S. Securities and Exchange Commission might be in sight, and the light at the end of the tunnel is a veritable trove of emails and other correspondence written by former SEC Corporation Finance Division Director William Hinman, a well-known attorney and crypto enthusiast argued.
The SEC could soon reach a settlement with Ripple in the bitter XRP securities lawsuit.
According to lawyer Bill Morgan, the William Hinman emails being in the hands of Ripple gives the U.S.-based crypto payments firm “real leverage”. The SEC will strive to keep these materials under wraps, which will not be possible if the case goes to trial. As such, the commission might be inclined to settle in order to keep them from the public eye.
The documents in question, concern former SEC official William Hinman who gave a market-moving speech back in 2018 declaring that Ethereum was not a security because, like bitcoin, it was “sufficiently decentralized”.
While some may argue that a Ripple and SEC settlement has always been a possibility, Morgan argued that it’s not merely theoretical, as the conditions for a settlement deal are actually quite good.
When asked what’s the probability that Ripple’s reply to the SEC’s brief on the summary judgment motion contains Hinman’s emails as exhibits, the lawyer explained that this reply could be one of the most telling documents in the case.
The SEC filed the lawsuit against Ripple in December 2020, shortly before Chairman Gary Gensler took charge at the securities agency. In the scorching complaint, the SEC claimed that Ripple’s sales of its XRP cryptocurrency represented an unregistered investment contract and securities offering.
Nearly two years later, the SEC faces a painful reckoning because Ripple pledged to fight back, as did tens of thousands of small investors who hold XRP.
Prominent legal experts like Rhode Island attorney John Deaton previously agreed that the SEC would rather settle with Ripple than have the Hinman documents used as evidence in court. Notably, Ripple’s general counsel, Stuart Alderoty, has clarified that they will settle immediately and pay a fine if the SEC proclaims that XRP doesn’t qualify as a security.
Meanwhile, most observers believe the SEC is poised for a bruising defeat against Ripple following a string of key procedural wins the blockchain payments firm scored in recent months. If Ripple wins, the verdict could set an important precedent for the crypto industry by dramatically limiting the SEC’s authority to regulate cryptocurrencies in the U.S.
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