According to the lawyer, these documents would become public regardless of the judge’s decision in the SEC v. Ripple case.
The emails and documents related to drafting the controversial 2018 speech by Bill Hinman at the Yahoo Finance All Markets Summit, collectively referred to as the Hinman documents, would eventually become public, according to Attorney John E. Deaton.
As explained by the CryptoLaw founder in a Twitter thread yesterday, if Judge Analisa Torres cites the documents in her summary judgment decision in the United States Securities and Exchange Commission (SEC) case against Ripple, she is likely to declare them “judicial documents” making them publicly accessible with some redactions.
More importantly, Deaton believes these documents will still become public even if this does not happen.
“I believe the emails and speech drafts will be made public at some point, regardless of Judge Torres’ decision on whether to seal,” Deaton wrote, surmising the first part of the Twitter thread. Recall that the SEC in omnibus motions has filed to seal the documents.
Why Is Deaton So Confident?
Deaton asserts that the SEC will launch future crypto enforcement actions where these documents would be relevant to the defense, particularly against crypto exchanges. Last July, the attorney had asserted that the SEC would go after a crypto exchange sooner or later. The lawyer maintains this view today.
The lawyer taps rumors of hundreds of subpoenas and wells notices sent to crypto companies and projects as warning signs. In addition, he reiterated the agency’s emphasis on crypto enforcement in its budget proposal, as reported by FOX Business’ Eleanor Terrett.
Meanwhile, he notes that the Hinman documents are also critical to ongoing litigation, citing the case against Dragonchain over DRGN, a token on the Ethereum blockchain, which the SEC also alleges to be an unregistered security. The lawyer points out that in this instance, access to the Hinman documents is more important to the defense than Ripple’s fair notice argument, also reminding community members that judges have already denied attorney-client privilege claims from the SEC.
In the controversial speech, Hinman, the then-director of the SEC’s Division of Corporation Finance, claimed that ETH is not a security because the blockchain was sufficiently decentralized. This is the same blockchain DRGN runs on, as highlighted above.
Deaton also highlighted that policy researcher Dr. Roslyn Layton had filed a motion in the Ripple case opposing the SEC’s request to seal the documents. In addition, Deaton says he has also filed a similar request under the Freedom of Information Act, which he says he intends to prosecute.
“The truth will see daylight,” Deaton asserted.
Why Access to the Hinman Documents Is So Important
Hinman had asserted that the cryptocurrencies on sufficiently decentralized blockchains are not securities, specifically naming Bitcoin and Ethereum as examples, despite the latter’s Initial Coin Offering in 2014.
Consequently, two years later, the SEC’s enforcement action against Ripple over XRP surprised many in the crypto community, leading the Ripple defense to request documents related to the speech draft. Notably, it raises the question of why the agency has chosen to give Ethereum a free pass and go after Ripple.
Recall that the SEC initially resisted Ripple’s request arguing that the speech represented Hinman’s personal opinions and, as such, was irrelevant to the case. However, when pressed by the judge to provide the documents, the agency shifted the narrative asserting that Hinman prepared the speech with the help of the agency’s lawyers, claiming attorney-client privilege.
However, after 18 months and six court orders from two judges, the SEC finally handed over the documents to Ripple in October.
As Dr. Layton explained after filing her motion to gain access to the documents, they would disclose if there were sinister motivations for the Ethereum free pass or if there is confusion among regulators, which would justify confusion amongst industry participants.
“The SEC wants you to think that it cares about disclosure, transparency and clarity. Don’t believe them. When the truth eventually comes out, the shamefulness of their behavior here will shock you,” Ripple Chief Executive Officer Brad Garlinghouse tweeted after the blockchain payments company confirmed receipt of the hotly contested documents.
Follow Us on Twitter and Facebook.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.