The Securities and Exchange Commission (SEC) sued Ripple almost two and half years ago, alleging the XRP token is a security. As the court case approaches the summary judgment stage, a raft of evidence was made available today by both sides. One of them was internal SEC email discussions about the Hinman speech in 2018 in which the SEC’s Bill Hinman stated that Ethereum was not a security. This was meant to be a smoking gun, but it’s not clear that it is. Other disclosures may work against Ripple.
The Hinman emails demonstrate many caveats by the SEC’s lawyers. An earlier draft was less definitive about Ethereum not being a security, and they suggested Hinman should make the position clearer.
Another piece of evidence is an SEC memo about an August 2018 meeting between Ripple’s CEO Brad Garlinghouse, its CTO David Schwartz and then SEC Chair Jay Clayton and Hinman. Garlinghouse states that Ripple is in “purgatory” around the uncertainty over whether XRP is a security. Clayton shut him down, saying it was not the proper forum for a discussion on the topic. And it was Clayton that initiated the SEC lawsuit just before his departure from office.
There’s a memo that redacted who wrote it and to whom it was addressed, which appears to be a Ripple lawyer providing advice. It gives an opinion that XRP is not a security, but its justification is optimistic on multiple counts.
Hundreds of disclosures were released today, and we didn’t have time to go through them all. However, we know that one set is from Ripple about its communications with crypto exchanges to get XRP listed. That’s unlikely to be in Ripple’s favor.
Meanwhile, Garlinghouse previously compared the SEC’s stance on crypto to a “drunk in denial”.