district ripple sec hinman

SEC’s request for clarification of that ruling,” he said.

The SEC sought partial review or clarification of the Court’s January 13, 2022 Order, which concluded in pertinent emails discussing and draft versions of a June 14, 2018 speech made by the then Director William Hinman.

What did the District Judge state?

Per the court document the speech and emails “are not shielded by the deliberate process privilege.”

In addition, the document states:

“The SEC’s assertion that the Speech was intended to communicate Corporation Finance’s approach to regulating digital asset offerings is inconsistent with the SEC’s and Hinman’s previous position that the Speech was intended to and did reflect his personal views”

It continued:

“The SEC seeks to have it both ways, but the Speech was either intended to reflect agency policy or it was not.

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Cryptocurrency prices were edging higher early Tuesday morning with Ethereum topping the $3,000 mark for the first time in two weeks.(REUTERS/Dado Ruvic/Illustration / Reuters)

The official, corporation finance chief William Hinman, argued in the speech that all digital coins except bitcoin and ether were possibly illegal and unregistered securities subject to SEC action. Not long after, the SEC charged Ripple with selling unregistered XRP tokens.

In arguing the case, the SEC initially stated Hinman’s speech was the opinion of one official, not designed to give market guidance by the commission. The agency has since changed its position on the nature of Hinman’s speech when Judge Netburn demanded all documents relating to the creation of the speech be handed over to the court.

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Hinman also met with the co-founders and investors in Ethereum ahead of a market-moving speech he gave in 2018 declaring the digital asset Ether to not be a security”.

And indeed, Hinman in 2018had intervenedto say thatEthereum and Bitcoin should not be considered as security, putting doubt on XRP.

Ripple’s victory: the emails and Hinman’s conflict of interest

In the emails,Hinman explicitly warned that he could never meet with Simpson Thacher while in office, then promptly and repeatedly violates the rule.

Specifically, the January 2018 emails state thatHinman seeks permission to meet with Thacher in London, but the SEC ethics clerk of the day responds with an explicit and pointed warning.

In her decision, Judge Netburn wrote,

[]…Hinman sought and obtained legal advice from SEC counsel in drafting his speech, suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law.

Disbarment of SEC attorneys in the cards?

An XRP proponent, Digital Asset Investor, shared their thoughts on Judge Netburn’s ruling against the SEC and argued that the case is heading toward disbarment for some SEC lawyers. The expert believes these comments from the ruling – “the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law” – indicate the possibility of disbarment of some lawyers on the regulator’s side.

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Hinman’s opinion, but the opinion of the Division of Corporation Finance, so they were covered by attorney-client privilege and should remain confidential. The SEC’s evolving characterization of Hinman’s speech has irked Netburn, who ruled Tuesday that the SEC must turn over the materials to the court, denying its request for attorney-client privilege and making an unusually harsh assessment of the agency’s motives.

“The hypocrisy in arguing to the court, on the one hand, that the speech is not relevant to the market’s understanding of how or whether the SEC will regulate cryptocurrency and, on the other hand, that Hinman sought and obtained legal advice from SEC counsel in drafting his speech, suggests that the SEC is adopting its litigation positions to further its desired goal and not out of a faithful allegiance to the law,” Netburn said.

An SEC spokesman had no comment.

Conversely, a Ripple win would signal a major setback in Gensler’s efforts to crack down on what he’s called the “wild west” of investing.


Ripple lawyers consider the drafts of Hinman’s speech and other related material to be crucial pieces of evidence that could also prove the SEC unfairly singled it out for enforcement action.

One thing is certain: The documents surrounding Hinman’s speech are important for both sides. SEC lawyers have been fighting to prevent Ripple from obtaining the drafts based on privilege, even as they have tweaked their exact rationale. Personal opinions are generally not subject to such strict privilege guidelines, and during Ripple’s deposition of Hinman in August 2021, he signed an affidavit stating that the speech was entirely his own opinion.

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Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its own position.”

A very big win for Ripple

Regarding the latest decision by the judge, Mr. Filan noted “this is a very big win for Ripple” and that the SEC now has 14 days to file an objection to this decision.

This is a very big win for Ripple.

— James K. Filan 🇺🇸🇮🇪90k+ (beware of imposters) (@FilanLaw) April 11, 2022

Notably, Finbold reported on April 9 that the new emails proved SEC’s conflict of interest in crypto regulation as nonprofit organization Empower Oversight made public SEC emails detailing improper conduct by the agency’s officials concerning the Ripple (XRP) lawsuit.

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