Court ruling grants public access to key documents in Ripple's legal battle against the SEC, potentially impacting the classification of XRP and signaling a win for the cryptocurrency community.
Ripple, the cryptocurrency company locked in a legal battle with the US Securities and Exchange Commission (SEC), has achieved a significant victory as the agency's motion to seal internal files, known as the "Hinman Speech documents," has been denied. These documents contain drafts and emails related to a speech given by William Hinman, former Director of the SEC's Division of Corporation Finance, over four years ago. Ripple's legal team has been eager to explore the basis for Hinman's statement that ether, the cryptocurrency associated with the Ethereum blockchain, was not considered a security at the time. This determination could potentially impact the classification of Ripple's own cryptocurrency, XRP.
In its filing on Tuesday, the SEC argued for the need for confidentiality, claiming that the documents were irrelevant to the summary judgment motions and that their disclosure could harm the agency's interests. However, Judge Analisa Torres disagreed, stating that the documents are judicial documents and subject to a strong presumption of public access. This decision triggered an 10% rally for XRP, signalling a positive development for Ripple.
While the SEC's request to redact certain information in the case, such as names and identifying information of expert witnesses and XRP investor declarants, personal and financial information, and the Hinman documents, was partially granted, public access to the documents has been permitted. Only the redacted information pertaining to the witnesses will remain sealed to protect their welfare. The majority of the SEC's expert reports and investor statements, including those relevant to the court's decision on the summary judgment motions, will be part of the public record. However, the documents have yet to be made available on official court websites.
Ripple, on the other hand, was also denied its motion to seal key information related to its business activities. References linking Ripple's revenues with XRP sales and the compensation offered to trading platforms to list XRP will be accessible to the public. Additionally, details regarding the amount of XRP sales targeted at investors through programmatic and institutional sales will not be sealed. Ripple has consistently released quarterly reports that disclose such activities, showing significant amounts of XRP bought and sold by the San Francisco-based company.
The lawsuit between Ripple and the SEC, which was initiated in December 2020, alleges that Ripple and its key executives conducted an illegal securities offering that raised over $1.3 billion in XRP sales. A determination via summary judgment is expected to be delivered later this year, although the exact timeline remains unclear. The SEC declined to comment on the matter.
As investors eagerly await the unsealed Hinman documents, the denial of the SEC's motion to seal records relating to the agency's internal deliberations after Hinman's speech is seen as a victory for Ripple and the broader crypto community. In the June 2018 speech, Hinman stated that Ether, the native token of the Ethereum blockchain, is not a security. The court's ruling affirms the strong presumption of public access to judicial documents and rejects the SEC's argument that sealing the documents is necessary for the preservation of "openness and candor" within the agency.
While some information will remain redacted, the release of the Hinman Speech documents could provide valuable insights into the SEC's stance on cryptocurrencies and potentially impact the outcome of Ripple's legal battle. The news of the documents' impending release led to jump in the price of XRP, which is currently trading at $0.445.