The long legal battle Ripple with the Securities and Exchange Commission (SEC) of the United States has taken a new turn: the company has obtained the right to access a highly disputed document containing quotes from an official of the SEC on the question of whether Ethereum (ETH) is a security or not.
The document contains the text of a 2018 speech that was delivered by a former senior SEC official, William Hinman. The latter then explained that ETH could not be classified as a security due to the fact that it was suitably decentralized.
The SEC has accused Ripple officials of selling the XRP token as an unregistered security, which executives deny. According to Ripple’s legal team, any form of admission by the SEC that ETH is not a security would help their case.
The trial judge Sarah Netburn, of the Southern District Court of New York, said that the SEC can no longer claim that this document and the emails associated with it are “privileged documents” – which means that the Ripple team will be able to use them as evidence in the case.
Hinman, in the emails, had shared his thoughts on the content of the speech, and the SEC had claimed that those exchanges were “simply peripheral to the formation of actual policy,” and therefore “privileged.” But Ms Netburn ruled that “emails regarding the speech or drafts are neither pre-decision nor deliberative agency material entitled to protection.”
She also noted:
“The personal opinions of agency employees are not protected by privilege unless they relate to the formulation or exercise of policy-oriented judgment.”
However, Netburn refused access to a series of other documents requested by the Ripple team, and appeared to suggest that some of Hinman’s claims in the emails were based on “opinions”.
Ripple failed, for example, to gain access to communications between Valerie Szczepanik, then a crypto chief at the SEC, and an official in the Department of treasure, as well as a presentation by Szczepanik at Michael Piwowar, former commissioner of the SEC.
Meanwhile, one of Ripple’s executive lawyers, Stuart Alderoty, criticized the SEC on Twitter, accusing the agency of trying to drag out the lawsuit.
Reacting to a speech by the current SEC chief, Gary Gensler, the attorney wrote that the SEC was “playing the delay card and using it to its advantage.”
Alderoty has writing :
“So much for ‘justice delayed is justice denied’. How about publicly committing to moving the Ripple case forward as ‘quickly’ as possible?”
He accused the SEC of using “regulation by enforcement to create an uneven playing field” and of “picking winners and losers by opaque rules that they invent as they go along.”
A group of XRP token holders also tried to interfere in the case, arguing that their views are not represented in the lawsuit – despite pressure from the SEC.
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