SEC Refuses to Surrender Draft of Willian Hinman’s Speech to Ripple

The United States Securities and Exchange Commission (SEC) has repeatedly refused to turn in the emails related to the drafted 2021 speech from Willian Hinman. In the speech, it was reportedly stated that Ethereum (ETH) which is the second largest cryptocurrency by market capitalization is not a security.

SEC has been in a fight with Ripple over the order in its lawsuit which enforces the watchdog to provide private email conversations from 2018. 

In 2020, SEC pressed charges against Ripple claiming that the crypto service provider sold XRP as an unregistered security. The charges also name the CEO, Brad Garlinghouse, and Chris Larsen Co-founder of Ripple as defendants in the lawsuit filed by the SEC.

Willian Hinman who once served as a Senior Advisor at Simpson Thacher & Bartlett LLP was also at one time the Director of the Securities and Exchange Commission’s Division of Corporation Finance. He was the presiding attorney in a case between Ripple and SEC and was suspected to have conflicting interests while initiating legal proceedings against Ripple. 

The point of contention was around Hinman’s interest in the Enterprise Ethereum Alliance, a company whose objective is to drive the use of Ethereum blockchain technology as an open standard to empower enterprises.

While passing his verdict, Hinman argued that Bitcoin (BTC) and ETH were not securities. Not agreeing to his pronouncement, Ripple’s legal team asked to know Hinman’s basis for discrediting XRP as a non-security.

Ripple also claimed to not have received concrete notice before XRP was declared as security. This has caused major uproars and several legal proceedings have been held on this matter. Still, SEC remains adamant and refused to turn over the requested document.

No Projected End in Sight

Thereafter, the security regulator sought Magistrate Judge Sarah Netburn’s permission to file a 30-page opening brief and a 10-page reply brief in support of its refusal of the court order to disclose Hinman’s speech.

In fact, the regulator argued that Hinman’s email is protected under the Deliberate Process Privilege (DPP). It later went on to say the emails were protected under the attorney-client privilege. This commotion is likely to stall the ongoing case until 2023. 

Meanwhile, in the heat of the proceedings Ripple added two members to its legal team. Kylie Chiseul Kim and Clayton J. Masterman are both lawyers from Kellogg Hansen. While hoping it would win, Ripple’s CEO has noted that an outcome short of this expectation may force it to exit the US as its operational headquarters.

Overall, Garlinghouse said the company would have spent as much as $100 million in expenses related to the Ripple-SEC case by the time it would have been over.