A U.S. federal judge has denied a motion filed by the U.S. Securities and Exchange Commission (SEC) to seal internal documents related to a speech given by the SEC’s former director William Hinman on whether cryptocurrencies are securities. The decision is seen in favor of Ripple Labs Inc. which was charged by the SEC as selling its XRP token as an unregistered security.
See related article: What is XRP and what is Ripple?
Fast facts
- Judge Analisa Torres of the U.S. District Court for the Southern District of New York ruled on Tuesday that sealing documents related to the William Hinman speech would not be related to preserving openness and candor within the agency, “nor would such an interest be substantial enough to outweigh the strong presumption of public access.”
- In December 2020, the SEC filed a lawsuit against Ripple alleging that its sale of XRP was an unregistered securities offering. The SEC also named Ripple’s executive chairman Chris Larsen and chief executive officer Brad Garlinghouse as co-defendants for allegedly aiding and abetting Ripple’s violations.
- In June 2018, Hinman, a former director of the SEC’s Division of Corporation Finance, said in a speech that sales of Ether were not securities transactions. The speech has become a major point of argument between the SEC and Ripple as Ripple seeks to bolster its fair notice defense.
- The result of the legal battle between Ripple and the SEC could set a precedent for how U.S. authorities classify cryptocurrencies.
- XRP gained 8% in the past 24 hours to trade at US$0.4561 at 10:30 a.m. in Hong Kong, according to data from CoinMarketCap.
- The latest court decision follows a September 2022 court ruling requiring the SEC to give the Hinman speech documents to Ripple, with the documents remaining confidential.
- In response to the Tuesday court ruling, Garlinghouse tweeted on Wednesday that it was “another win for transparency” and that unredacted Hinman emails would be “publicly available soon.”
- The judge also ruled on Tuesday that the names and relevant identifying information of the SEC’s experts and investor declarants can be sealed.
- However, the judge denied Ripple’s motion to seal references related to Ripple’s revenues with XRP sales and certain financial information linked to the token.
See related article: SEC in no rush to respond to Coinbase calls for regulatory clarity