- Unsealed documents from the Security and Exchange Commission (SEC) reveal internal concerns that Bill Hinman’s 2018 speech, in which he indicated Ether was not a security, could irreversibly fix the agency’s stance.
- Ripple CEO Brad Garlinghouse has expressed optimism that these documents will prove valuable in the ongoing SEC-Ripple lawsuit.
New light has been shed on the Security and Exchange Commission’s (SEC) reservations about Ether (ETH) not being classified as a security, according to recently disclosed documents related to former Corporate Finance Division Director Bill Hinman’s 2018 speech. The internal comments express worry that such a statement could bind the SEC to a view difficult to reverse in future.
Despite the cautionary notes in Hinman’s statement, the document annotations point out the potential challenges for the SEC to alter its position on Ether later. The rest of the paragraph, according to the SEC feedback, alludes strongly to this reasoning being applicable to Ether.
The focal point of these documents is Hinman’s public address in 2018, where he posited that while cryptocurrencies like Bitcoin (BTC) and Ether might initially be securities, they could transition into a commodity-like state once they achieve sufficient decentralization.
The Ripple CEO, Brad Garlinghouse, expressed on June 12 that the revelation of these documents would be of significant value. The timing of the documents’ unsealing is notable given the current tumultuous period within the cryptocurrency industry, with the SEC recently seeking to freeze the assets of Binance.US.
The SEC initiated a legal battle against Ripple in December 2020, accusing it of selling its native token, XRP, in an unregistered securities offering. Ripple, in response, has staunchly rejected this assertion, contending that XRP does not fulfil the criteria of the Howey test and hence should not be classified as a security. This ongoing lawsuit has caused ripples in the broader crypto market and elicited closer scrutiny of the regulatory framework for cryptocurrencies.
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