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Ripple Achieves Another Small Win Against US SEC Lawsuit

Ripple Achieves Another Small Win Against US SEC Lawsuit
  • Ripple has notched up another small win on its ongoing battle with the U.S. SEC.
  • The Judge denied SEC’s motion to suppress the deposition of SEC’s William Hinman.
  • More so, the Judge ordered Hinman to sit for a deposition.

Ripple (XRP), a San Francisco-based fintech company, has notched up another small win on its ongoing battle with the U.S. Securities and Exchange Commission (SEC).

On Thursday, U.S. District Court Judge Sarah Netburn denied the SEC’s motion to suppress the deposition of the former director of SEC’s Division of Corporation Finance, William Hinman. Judge Sarah ordered Hinman to sit for a deposition. She said, as a high-ranking official who led one of the divisions of SEC, he held “substantial authority in a very important federal agency.”

It can be recalled, in June 2018, Hinman said in a speech that based on his understanding, the “current offers and sale of Ether are not securities transactions.” Currently, the financial regulator argues that it does not speak through its staff or individual commissioners but only through enforcement actions. Thus, anything Hinman has said previously is privileged as ‘deliberative’.

With that said, SEC explained to Judge that the deliberative process privilege called ‘Exemption 5’ would be invoked if Hinman was deposed. Hence, Judge Netburn replied, the case

“involves significant policy decisions in our markets, the amount in controversy is substantial and the public’s interest, in this case, is significant.”

Consequently, deposition can in fact add more weight to Ripple’s claim that the XRP token is not a security. Thus, Ripple can ask Hinman to testify about the reasoning behind his decision on ETH at that time if there is no appeal from the SEC. With this, they can attempt to apply that same rationale to XRP.

Based on Bloomberg’s report, the SEC fought the subpoena stating,

“would subject high-level government officials to depositions regarding every law, regulation, or policy they consulted on or spoke about and that later underlay an enforcement action.” 

Lastly, Ripple argues that the SEC cannot regulate XRP as a security because it is a medium of exchange used for domestic and international transactions.

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Britney is a market analyst who covers stories about the cryptocurrency world. She holds a Business Administration Degree in Finance and aims to let the readers understand crypto from a beginner perspective.