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- The Ripple vs SEC lawsuit has taken a new twist with new revelations.
- The current position is that the latest discoveries can stir the company’s win.
New information has surfaced in light of the Ripple Labs vs the United States Securities and Exchange Commission (SEC) court case indicating that the regulator previously confirmed that XRP is not security long before the Hinman speech was even delivered. This discovery was made by pro-XRP lawyer and the founder of Crypto Law John Deaton.
He posted a Twitter thread with a screenshot of a small footnote in a Ripple opposition brief from last year confirming a discussion with SEC staff prior to the Hinman speech.
“When you look at all the other SEC-LIT-EMAILS cited in Ripple’s opposition, they are redacted. The one about there being reasonable grounds to not believe XRP satisfies all the Howey factors is not redacted,” Deaton tweeted alongside the expository screenshot.
Read this short 🧵 please. When you look at all the other SEC-LIT-EMAILS cited in Ripple’s opposition, they are redacted. The one about there being reasonable grounds to not believe XRP satisfies all the Howey factors is not redacted. https://t.co/qoaCbjk7rg pic.twitter.com/Nc6kfNMJ4c
— John E Deaton (@JohnEDeaton1) May 21, 2023
This revelation will be a major game-changer for Ripple seeing that the lawsuit has lingered for too long. In December 2020, the U.S. regulator filed the lawsuit against the blockchain payments firm, its Chief Executive Officer (CEO) Brad Garlinghouse as well as the Co-Founder, Chris Larsen, for the sales of unregistered securities. Precisely, the filing stated that Ripple had raised over $1.3 billion through an unregistered, ongoing securities offering for the XRP coin.
On the other hand, Ripple has been arguing against the SEC’s stance stating that XRP is not a security and should therefore not be regarded as such.
In the weeks following SEC’s charge, several XRP investors filed a petition against the regulator and its then-acting chairman Elad Roisman. In their argument, they claimed SEC’s action against Ripple does not sync with its mission statement to “protect investors, promote fairness and share information about companies…to help investors make informed decisions and invest with confidence.”
Ripple vs SEC: William Hinman Speech Controversy
The earlier classification of Bitcoin (BTC) and Ethereum (ETH) as non-securities by the market regulator was referenced as one of the reasons why XRP is not securities.
In addition, the statement of Brian Brooks who was at the time the Acting Director of the Office of the Comptroller of the Currency (OCC) was called to remembrance. Brooks had suggested that the government can use platforms like Ripple to replace the SWIFT system.
These petitions did not make any significant change to the lawsuit until Ripple began to talk about a speech by William Hinman, a one-time director of corporate finance at the SEC. Hinman clearly declared that BTC and ETH are not securities and this became a point of controversy for the SEC and an assumed winning point for Ripple.
Consequently, Ripple fought for a deposition of the former director while the SEC opposed it. Recently, District Judge Analisa Torres of the U.S. District Court for the Southern District of New York ruled that the SEC cannot hold back the Hinman document as they are relevant to the judiciary process, therefore, it is expected to be turned over to the public after Ripple Labs has drawn its defense with them.
Despite the broad optimism of massive XRP price growth up to $20 by pundits, it is not certain how this revelation would influence the price of XRP in the long term but at the time of this writing the token was trading at $0.4502.
