A key development in the SEC-Ripple lawsuit as the court dismissed the agency’s “privilege” argument regarding some critical documents requested by the defendants.
The SEC’s privilege argument is rejected by the court
In a recent ruling, Judge Sara Netburn dismissed the plaintiff’s “privileged” argument for some documents, but the court recognized the SEC’s stance on others.
It has been some time since Ripple pressed the SEC for the speech of former agency official William Hinman. In a famous 2018 speech, William Hinman, former director of the Division of Corporation Finance at the SEC, stated that Ethereum is not a security because the cryptocurrency is sufficiently decentralized.
Ripple believed that Ethereum is not a security, neither is XRP. To further substantiate his stance, the defendant has asked the SEC for documents related to this particular speech. Although the SEC denied Hinman’s speech on the grounds that it merely reflected the official’s personal views, it refused to release documents related to the speech under the privilege clause.
The judgment and its possible consequences
Given the context, the court’s ruling could prove to be one of the determining factors. Magistrate Judge Sara Netburn ruled that despite the SEC’s admission that the speech was actually discussed by agency employees, the speech appears to be merely “Peripherals to actual policy making”. She further added:
“Accordingly, e-mails about speeches or draft versions are neither preliminary nor advisory official documents worthy of protection.”
As a result, the SEC would now be forced to produce the documents relating to Hinman’s speech. Once the court identifies the main reason Ethereum was not considered a security by the SEC official, it could then be applied to XRP.