Ripple vs. SEC: SEC Enforcement Director Declined Answering Questions About William Hinman’s 2018 Speech

The SEC Enforcement Director declined to comment on Hinman’s saga. 

At Tuesday’s oversight hearing on the SEC’s enforcement division, held by a Congressional subcommittee, several crypto-related issues, including the lawsuit between the agency and Ripple, were discussed.

U.S. Rep. Warren Davidson, D-Ohio, quizzed Gurbir Grewal, the SEC’s Director of Enforcement, to clarify details related to William Hinman’s 2018 speech.

Rep. Davidson was curious to know whether the 2018 Hinman speech would be considered views of the SEC since Hinman sought guidance from SEC staff while drafting the speech.

Grewal refused to answer the question, saying, “That hypothetical is a real scenario playing out in the [Ripple] litigation.

The SEC’s Director of Enforcement also refused to answer questions to determine whether Hinman submitted the drafted speech to the agency’s Ethics Division for approval.

HEARING: @WarrenDavidson presses @SECEnfDirector on "selective enforcement" in crypto and Hinman's $ETH speech. Grewal refuses to answer. Full clip? pic.twitter.com/nKpABnk7PU

— CryptoLaw (@CryptoLawUS) July 19, 2022

Controversy Surrounding Hinman’s Speech

There has been a lot of controversy surrounding Hinman’s 2018 speech, where he declared that Ethereum is not a security.

The speech has become integral to the litigation between Ripple and the Securities and Exchange Commission (SEC). Ripple had argued that the documents used in drafting the speech are essential in clarifying that XRP is not a security. The documents contained 68 draft emails among SEC staff at the time, which resulted in formulating ETH free pass speech.

Since XRP and ETH were in a head-to-head battle over which coin would ultimately become the second-largest cryptocurrency, Ripple believes there is no way the SEC staff did not discuss XRP in the document, now referred to as the Hinman document.

However, all efforts to have the SEC submit the documents have ended in futility. Even though Judge Sarah Netburn had ordered the agency to surrender the Hinman document to aid Ripple’s fair notice defense, the SEC had launched several bids to prevent this from happening.

Last week, the SEC saw its recent attempt to hold on to the document denied. As TheCryptoBasic reported, Judge Netburn denied SEC’s motion that Hinman’s document is protected by the attorney-client privilege.

This implies that the SEC would have no option but to surrender the document as ordered. Many people following the Ripple vs. SEC lawsuit, including attorney John Deaton, believe the Securities and Exchange Commission would instead settle with Ripple than submit the documents.

However, the cryptocurrency community is closely watching the SEC’s move following the recent ruling with Hinman’s document.