Newly released documents related to former SEC director William Hinman’s speech have shed light on the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs. The documents reveal comments from the SEC’s Trading and Markets Department on the draft version of Hinman’s 2018 speech, in which he stated that bitcoin and ether should not be considered securities. Prior to delivering the speech, Hinman expressed in an email that it implied no need to regulate ether as a security in its current form.
The Trading and Markets Department commented favorably on the speech, acknowledging its alignment with public sentiment and supportive of its message. However, it also expressed concerns about the statement regarding ether not being a security, suggesting that further internal discussion was necessary if Hinman intended to make a blanket statement to that effect.
As the Ripple Labs lawsuit against the SEC continues, the disclosure of these documents adds another layer of complexity. The SEC’s allegations revolve around Ripple’s purported unregistered securities offering involving its cryptocurrency, XRP. Throughout the legal proceedings, Ripple has consistently pointed to Hinman’s statements as evidence contradicting the SEC’s classification of XRP as a security.
The public disclosure of these documents could ignite a significant debate surrounding the classification of cryptocurrencies as securities, particularly in the current challenging regulatory environment. It coincides with the SEC’s recent lawsuits against Coinbase and Binance, accusing them of selling unregistered securities. The outcome of these legal proceedings, along with the response to Coinbase’s rulemaking petition, is anticipated to have a significant impact on the crypto industry’s regulatory landscape.