Ripple CEO Brad Garlinghouse Slams SEC Following Hinman Email Reveal, Says Regulator Acting in Bad Faith

June 15, 2023 The Daily Hodl

Ripple partners with Colombia’s central bank to explore blockchain technology

June 15, 2023 Coin Telegraph

CBDC

The pilot program will run through 2023 with the intent of demonstrating blockchain utility to the general public.

Banco de la República, Colombia’s central bank, is partnering with Peersyst and Ripple to pilot blockchain technology on the XRP ledger.

The Ministry of Information and Communications Technologies (MinTIC) in Colombia will oversee the project, which will use Ripple’s recently launched central bank digital currency (CBDC) platform.

Ripple and @Peersyst are partnering with Colombia’s @BancoRepublica in conjunction with @Ministerio_TIC to pilot use cases that will enhance Colombia’s high-value payment system.

Learn more about the partnership: https://t.co/X9jyJ3pvDa
— Ripple (@Ripple) June 15, 2023

An announcement published on June 15 says the pilot will run through 2023 and states that its purpose is to demonstrate the technology’s utility to the public:

“The goal of the third phase of MinTIC’s experimentation of blockchain will be to educate national and territorial public entities through interactive and collaborative real-world application experiments of how blockchain technology’s unparalleled speed, scalability, and transparency can revolutionize payment systems and data management.”

The XRP ledger CBDC platform also serves as the basis for similar pilot projects in Hong Kong, Bhutan, Palau and Montenegro.

CBDC team making significant progress with the launch of the new #cbdc platform Four countries now announced Grateful to the team at @Ripple who are developing the best platform for the future of Digital Currencies Palau Bhutan Montenegro Hong Kong …
— Antony Welfare (@AntonyWelfare) May 19, 2023

Ripple’s continued growth comes amid ongoing legal challenges stemming from a Securities and Exchange Commission (SEC) suit against the company filed in 2020.

The SEC alleges that Ripple sold $1.3 billion worth of unregistered securities in the form of its XRP (XRP) token. Ripple claims that XRP isn’t a security and that the SEC never gave it any notice or warning.

As Cointelegraph recently reported, the company also claims it spent $200 million defending itself from the suit. While there’s currently no definitive answer to the question of when the trial will end, it’s widely believed that the release of the so-called “Hinman documents” could affect the remaining legal proceedings.

The Hinman documents reference internal SEC communications related to a 2018 speech given by William Hinman, the former director of the SEC’s corporate finance division. During the speech, Hinman commented that cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) might start out as securities but could become commodities later once they become sufficiently decentralized.

At the time, internal SEC notes indicated that the commission was concerned Hinman’s comments could make it “difficult for the agency to take a different position on Ether in the future.”

While Himan’s speech was given before the SEC’s suit against Ripple and didn’t directly reference XRP, experts argue that it shows that even the SEC understood there was confusion surrounding the agency’s treatment of cryptocurrencies.

Hinman documents in Ripple case raise questions about SEC’s motives

June 15, 2023 Coin Telegraph

Coin Telegraph

According to crypto lawyer Fred Rispoli, the Hinman documents depict an agency prioritizing expanding its jurisdiction over fulfilling its core responsibility of safeguarding U.S. investors.

The newly released Hinman documents relevant to the ongoing legal battle between Ripple and the United States Securities and Exchange Commission have shed light on internal divisions within the SEC and raised questions about its motives.

The Hinman documents pertain to internal SEC communications regarding a speech delivered by former director William Hinman in 2018. During the speech, Hinman said that Ether (ETH), one of the largest cryptocurrencies, should not be categorized as a security.

In an interview with Cointelegraph, crypto lawyer and founder of Hodl Law, Fred Rispoli, shared his thoughts on the recently released documents. According to Rispoli, the Hinman documents paint a picture of an agency more interested in expanding its jurisdiction than fulfilling its primary mission of protecting U.S. investors:

“These documents are substantively bad for the SEC but the optics are even more damaging. Taken together, they demonstrate an SEC that is clearly more concerned with expanding its turf rather than its near-ninety-year mission of protecting US investors. They show the revolving-door aspect of agency bureaucracy at its worst.”

He explained further: “For example, one of the unredacted documents showcase that the SEC’s Office of General Counsel recognized that crypto likely falls into “an ‘other’ category—it’s not a security because there’s no controlling group (at least in the Howey sense), yet, like many other things (medication, credit cards) there may be a need for regulation to protect purchasers.”

The "Howey Test" is a legal framework established by the U.S. Supreme Court in SEC v. Howey in 1946 to determine if a transaction qualifies as an investment contract and therefore falls under the definition of a security.

According to Rispoli, the core issue is that while cryptocurrencies may possess certain security attributes, their fundamental characteristics set them apart from traditional securities. Consequently, regulation is necessary but should not be entrusted solely to "power-hungry" securities regulators. He explained:

“Crypto may have some security attributes but its other attributes make it fundamentally different than securities. Hence, there is a need for regulation but clearly not from the power-hungry SEC. The SEC also recognizes this and is scrambling to protect and expand its jurisdiction even in the absence of Congressional authorization.”

The release of the Hinman documents has opened up a Pandora's box of potential consequences for Ripple and the wider crypto industry. According to Rispoli, “Now that these documents are public, it demonstrates the rabbit hole goes much, much deeper and further document requests will be issued soon, be it from other litigants, Congressional investigators, FOIA requests, etc.”

Rispoli speculates that additional documents may be requested that shed light on the events surrounding Hinman's speech, as well as highlight the potential involvement of various entities and individuals in shaping the narrative. This includes exploring SEC staff communications about why Hinman disregarded their recommendations to exclude Ether from his speech. Additionally, the content of communications between third parties like Vitalik Buterin and Hinman, conducted via SEC email, private email, and text, about coaching Hinman in describing the Ethereum project, could be requested.

Concerning how the released documents could affect other ongoing or future legal battles within the crypto industry, Rispoli stated that “These documents will be helpful for the fair notice defense claims in the Dragonchain and Coinbase cases, and really any case involving a token issued on the Ethereum Network." He added:

"They also help on the intangible level of persuading both judges and juries to instinctively dislike and distrust the SEC for its very questionable practices that seek to deliberately make the crypto investing regulatory framework more confusing and uncertain.”

Rispoli concluded that his law firm, Hodl Law, sued the SEC in federal court in the Southern District of California to establish that Ether and the Ethereum Network "are not securities according to federal law." The SEC has sought to dismiss the case, arguing that it is not obligated to disclose its stance to the public. However, Hodl Law intends to present the Hinman documents to the judge to highlight the SEC's alleged disregard for good faith and its departure from legal obligations.

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

Ripple verdict could spark a new bull market — Or more malaise

June 15, 2023 Coin Telegraph

Coin Telegraph

SEC v. Ripple is a landmark legal battle that is going to shape how courts treat cryptocurrencies — and a ruling is due soon.

The final quarter of 2020 saw the launch of a precedent-setting lawsuit by the United States Securities and Exchange Commission against Ripple Labs, CEO Bradley Garlinghouse and co-founder Christian A. Larsen. The allegation: raising north of $1 billion in 2013 through the unregistered sale of a purported security, XRP (XRP).

The implications of Ripple’s bold choice to challenge the lawsuit in court radiate far beyond the company. The judgment could become the Rosetta Stone for determining whether other cryptocurrencies are deemed securities. A Ripple victory could fuel a new era of acceptance, investment and confidence in digital assets.

Defeat, on the other hand, could hinder mainstream adoption, prompt the SEC to pursue similar cases, increase market volatility, and drain talent from the United States.

The timing of this potential landmark decision dovetails with a season of intense scrutiny by the SEC under the leadership of Chairman Gary Gensler.

Ripple and XRP in the eye of the storm

Ripple, the payment company behind XRP, introduced the cryptocurrency token in 2013. Designed to facilitate fast, low-cost cross-border transactions, XRP stands as a potential replacement for the existing SWIFT system.

Ripple has entrenched its value in the financial landscape by establishing partnerships with top-tier institutions, such as American Express, Santander and MoneyGram, and processed transactions exceeding $10 billion in 2021 alone.

The SEC’s allegation revolves around Ripple’s purported unregistered sale of XRP, an investment contract or “security” by their definition. Ripple’s defense, however, asserts that XRP doesn’t pass the Howey test — the measure of an investment contract — and, therefore, cannot be considered a security.

The court case, then, hinges on this perennial question: Is XRP a security?

All eyes on the Hinman documents

The turbulent dispute between the SEC and Ripple is expected to conclude in September. Before then, the Ripple community’s attention will be on June 13, when the Hinman materials are unsealed, which could have a significant implication on the verdict.

The emails wont change the Howey analysis but they will likely show the difficulty in applying 1930s/40s precedent to modern day technology. The emails will likely help @coinbase and @ripple in the Court of Public Opinion and hopefully drive bipartisan efforts in Congress. https://t.co/DfpZaLgw4O
— John E Deaton (@JohnEDeaton1) June 11, 2023

These documents refer to a 2018 speech by SEC Director William Hinman, during which he provided guidance on how the SEC might analyze whether a particular cryptocurrency should be considered a security. This guidance became significant in the Ripple case, as Ripple’s defense argued that Hinman’s statements bred confusion, leading market participants, including Ripple, to believe that XRP was not a security.

Cue a desperate scramble by the SEC in December 2022 to seal said documents and shield them from public scrutiny — documents that Ripple believes are pivotal to its victory against the regulator.

Implications of the verdict

This face-off between Ripple and SEC transcends the future of XRP. It’s a high-stakes drama that could very well be the defining moment for the cryptocurrency industry. In 2022, the SEC’s Gensler stated that “many [cryptocurrencies] are securities,” signaling the regulator’s intent to scrutinize more digital assets.

The implications fall into four main categories.

Adoption and Innovation: A Ripple win could foster increased consumer and institutional trust in digital assets. It could spur investment in the space, emboldening enterprises to create groundbreaking products and services within a clarified regulatory framework. A loss could hinder mainstream acceptance as regulatory uncertainties continue to deter potential participants.

Legal Precedent: If Ripple wins, it could strengthen the argument against categorizing cryptocurrencies as securities, providing the industry with greater legal clarity and a solid footing for future growth. If Ripple loses, it may prompt further SEC investigations into potential securities violations. We’re already witnessing this trend with the case against Coinbase, Binance and Tron founder Justin Sun.

Market Volatility: A Ripple victory could boost investor confidence, potentially inflating the value of digital assets, whereas a loss might spark market volatility, leading to a sell-off of XRP and other digital assets perceived as securities.

Talent Migration: Should the SEC emerge victorious, it may spur a talent exodus out of the U.S. toward countries with greater regulatory clarity; a trend that’s already noticeable, with Ripple themselves actively looking to make the leap.

The end is near

Attorney John Deaton, founder of CryptoLaw, has been a staunch advocate for Ripple against the SEC. In a June 3 interview, he predicted a 25% chance of District Judge Analisa Torres ruling in favor of Ripple and a 50% chance of a “middle ground” verdict. But with Binance and Coinbase now on the SEC guillotine, these predictions might need to be reconsidered.

Garlinghouse remains optimistic about the verdict but, ultimately, “betrayed” by a regulator who’s given them conflicting guidance. A sentiment that’s been echoed across the crypto landscape in the United States.

The U.S. has long been the go-to destination for ambitious startups, the home of breakthrough innovations — a global leader across multiple industries. But the U.S.’ approach toward progressing the crypto industry goes against these historical precedents of providing supportive regulatory environments and promoting growth.

With such high stakes for investor confidence, legal clarity and global talent migration, the SEC v. Ripple case is a landmark battle that could shape the future of the cryptocurrency landscape in the United States.

Hamilton Keats is CEO and co-founder of Krayon Digital, a provider of MPC-based digital asset wallets. Prior to building Web3 infrastructure with Krayon, Hamilton co-founded Platform One, a London-based wealth management platform, and worked at HSBC and DVB Bank. He holds a B.Sc. in physics from the Imperial College London.

Its outcome could either foster a new era of innovation and mainstream acceptance of digital assets or unleash a wave of market turbulence and an exodus of U.S.-based crypto firms seeking more favorable jurisdictions with clearer guidelines.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Trader Predicts Over 50% Jump for One Top-10 Altcoin, Says Bitcoin Could Get ‘Violent’ if Support Level Crumbles

June 15, 2023 The Daily Hodl

Price analysis 6/14: BTC, ETH, BNB, XRP, ADA, DOGE, SOL, MATIC, LTC, DOT

June 14, 2023 Coin Telegraph

Binance Coin

The entire crypto market awaits the result of todays Federal Reserve presser, and traders are hopeful that positive news will trigger a price breakout to the upside.

The United States equities markets rose after the consumer price index print on June 13 came in below expectations but Bitcoin (BTC) and the altcoins failed to recover. This suggests that cryptocurrency traders are focused on crypto-specific issues and are not buying on favorable macroeconomic news.

However, there is a ray of hope for the bulls because Bitcoin is still holding above the $25,000 support. MicroStrategy co-founder Michael Saylor said in a Bloomberg interview on June 13 that the regulatory crackdown by the Securities and Exchange Commission may be bullish for Bitcoin. Saylor expects Bitcoin’s dominance to hit 80% in the future as “mega institutional money” flows into crypto after the “confusion and anxiety” dies down.

Although Saylor’s views may sound comforting to the Bitcoin bulls, they should keep in mind that MicroStrategy has a large position in Bitcoin, hence his views may be biased.

*Daily cryptocurrency market performance. Source:* *Coin360*

Traders hate uncertainty and generally stay on the sidelines until clarity emerges. The same may happen with the cryptocurrency markets in the near term. A trending move is likely to begin only after investors sense some regulatory clarity. During uncertain phases, traders could consider reducing their position size to avoid getting whipsawed.

What are the levels that may act as a resistance in Bitcoin and the major altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin price analysis

Bitcoin climbed close to the 20-day exponential moving average ($26,531) on June 13 but the long wick on the candlestick shows that the bears sold at higher levels.

*BTC/USDT daily chart. Source: TradingView*

The price has been stuck between the 20-day EMA and the crucial support at $25,250 for the past few days. This suggests that bulls are buying the dips but the bears are not willing to let go of their advantage.

The downsloping moving averages indicate that bears have the upper hand but the positive divergence on the relative strength index (RSI) indicates that the selling pressure may be reducing.

If buyers kick the price above the 20-day EMA, the BTC/USDT pair may rally to the resistance line of the descending channel. Buyers will have to overcome this roadblock to signal the start of a march to $31,000.

Instead, if the price turns down from the current level and breaks below $25,250, it will suggest that the bulls have given up. The pair may first slump to the support line of the channel and eventually to the psychologically important level of $20,000.

Ether price analysis

Ether’s (ETH) shallow bounce off the strong support at $1,700 indicates a lack of demand at higher levels. A tight consolidation near a support increases the risk of a breakdown.

*ETH/USDT daily chart. Source: TradingView*

Therefore, the buyers will have to quickly propel the price above the moving averages. If they manage to do that, the ETH/USDT pair could first rise to $1,928 and then make a dash toward the overhead resistance at $2,000.

Contrary to this assumption, if the price turns down from the current level or the moving averages, it will indicate that bears are selling on every minor rally. That could sink the pair below $1,700. There is a minor support at $1,600 but if that also fails to hold, the decline may extend to $1,352.

BNB price analysis

BNB (BNB) once again bounced off the strong support at $220 on June 12, indicating that the bulls are aggressively protecting the level.

*BNB/USDT daily chart. Source: TradingView*

The BNB/USDT pair has started a recovery which is likely to face stiff resistance at the 38.2% Fibonacci retracement at $252 and again at the breakdown level of $265. If the price turns down from either level, it will suggest that the bears are viewing the relief rallies as a selling opportunity. The pair could then once again slide to $220.

On the contrary, if the bulls push and sustain the price above the breakdown level of $265, it may trap the aggressive bears. There is a minor resistance at the 20-day EMA ($272) but it is likely to be crossed.

XRP price analysis

Buyers shoved XRP (XRP) above the overhead resistance at $0.56 on June 13 but they could not sustain the higher levels.

*XRP/USDT daily chart. Source: TradingView*

The XRP/USDT pair turned down sharply, forming a long wick on the day’s candlestick. The bears are trying to strengthen their position further by pulling the price below the 20-day EMA ($0.50). Below this level, the next important support to watch out for is the 50-day SMA ($0.47).

If this level gives way, the selling pressure could increase and the pair may nosedive to the next major support near $0.41. On the contrary, if the price bounces off the 50-day SMA, it will signal a range-bound action for a few days.

Cardano price analysis

Cardano’s (ADA) recovery halted near the breakdown level of $0.30, indicating that the bears are fiercely protecting the level.

*ADA/USDT daily chart. Source: TradingView*

If bulls fail to kick the price above $0.30, the ADA/USDT pair may turn down and slide to the support at $0.24. A strong rebound off this level may keep the pair range-bound between $0.24 and $0.30 for a few days.

If buyers push the price above $0.30, it will suggest that the decline may have ended in the near term. The pair could then rise to the 20-day EMA ($0.32) and subsequently to the 50-day SMA ($0.36).

Dogecoin price analysis

Dogecoin (DOGE) has been sustaining above the $0.06 level since June 11 but a minor negative is that the bulls have failed to start a meaningful bounce.

*DOGE/USDT daily chart. Source: TradingView*

The failure to rise above the 20-day EMA ($0.07) may give rise to another round of selling by the bears. If the $0.06 support gives way, the DOGE/USDT pair could plunge to the vital support at $0.05. Buyers are expected to defend this level with vigor.

On the upside, the first sign of strength will be a break and close above the 20-day EMA. That will increase the possibility of a relief rally to $0.08 where the bulls may again face strong resistance by the bears.

Solana price analysis

Solana (SOL) has been witnessing a tough battle between the bulls and the bears near the crucial support at $15.28.

*SOL/USDT daily chart. Source: TradingView*

The bulls are struggling to sustain the price above $15.28 but a minor solace is that they have not allowed the SOL/USDT pair to remain below $15. The oversold levels on the RSI suggest that a relief rally is possible but the bulls will have to overcome the barrier at $16.20. If they manage to do that, the pair may start an up-move to the 20-day EMA ($18.16).

Conversely, if the price turns down from the current level, it will suggest that the bears remain in control. If the price slips below $15, the pair could retest the intraday low of $12.80 made on June 10.

Polygon price analysis

Polygon (MATIC) nosedived below the support at $0.69 and hit the psychologically important level of $0.50 on June 10.

*MATIC/USDT daily chart. Source: TradingView*

The bulls purchased the dip and are trying to start a recovery, which is likely to face stiff resistance at the breakdown level of $0.69. If the price turns down from this level, it will suggest that the bears have flipped the level into resistance. That could result in a retest of the support at $0.50.

Contrarily, if bulls thrust the price above $0.69, the MATIC/USDT pair may reach the 20-day EMA ($0.76). A break above this level will indicate that the bears are losing their grip. The pair may then attempt a rally to $1.

Litecoin price analysis

Litecoin (LTC) turned down from the moving averages and plummeted below the support line of the symmetrical triangle pattern on June 10, indicating that the bears overpowered the bulls.

*LTC/USDT daily chart. Source: TradingView*

The LTC/USDT pair is attempting a bounce off the horizontal support at $75 but the failure of the bulls to push the price back into the triangle suggests that the bears are selling on minor rallies. That increases the likelihood of a further fall below $75. The next major support on the downside is $65.

Alternatively, if the price turns up from the current level and re-enters the triangle, it will suggest that the recent breakdown may have been a bear trap. The positive momentum may pick up after the bulls push the price above $91.50.

Polkadot price analysis

Polkadot (DOT) rebounded off the strong support at $4.22 on June 10, indicating that the bulls are trying to arrest the decline.

*DOT/USDT daily chart. Source: TradingView*

The relief rally could reach the 20-day EMA ($4.98) where the bears are likely to sell aggressively. If the price turns down from this level, the DOT/USDT pair may retest the support at $4.22. A break below this level could start a move to $4 and later to $3.50.

On the contrary, if the bulls push the price above the 20-day EMA, it will suggest that the bears may be losing their grip. The pair could first rise to $5.15 and then to $5.56. Until buyers clear this hurdle, the sellers will remain in control.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ripple welcomes MiCA regulation as US lawsuit highlights lack of clarity

June 14, 2023 Coin Telegraph

Adoption

Ripple’s operations gear up in Europe and Asia despite an ongoing lawsuit with the U.S. Securities and Exchange Commission.

Cryptocurrency payments service provider Ripple continues to see global adoption of its payment services despite a long-winded legal battle with the United States Securities and Exchange Commission (SEC) over its XRP (XRP) token.

In a wide-ranging interview with Cointelegraph at Money 20/20 in Amsterdam, Sendi Young, Ripple’s managing director for Europe and the United Kingdom, unpacked the firm’s growing remit worldwide, despite ongoing regulatory scrutiny in the United States.

Cryptocurrency exchanges and businesses have clashed with U.S. regulators over the past year, with a lack of regulatory clarity threatening to stifle innovation and adoption of blockchain-based services, systems, and cryptocurrencies.

Meanwhile, the European Union is well on its way to instituting a set of requirements and standards for the cryptocurrency industry across the continent after the long-awaited Markets in Crypto-Assets (MiCA) legislation was signed into law on May 31.

The divergence of regulatory perspectives in the U.S. and Europe is wide, Young told Cointelegraph, highlighting Ripple’s business growth outside of the U.S., which is in part due to progressive regulatory oversight in different markets:

“That lawsuit is very isolated to U.S. regulations or the lack of clarity and certainty thereof. It almost accentuates the kind of environment that we have in Europe and the United Kingdom.”

Young added that Ripple continues to foster private-public partnerships, and open dialogue with regulators and policymakers, with both parties educating each other as the industry develops:

“It does enable business to grow and innovation to happen. I would say we’re very fortunate in this sort of U.K., Europe environment, which is setting standards globally.”

In a European context, Young believes the MiCA regulatory framework will facilitate a “level playing field” that fosters healthy competition and innovation in the cryptocurrency space, while driving adoption among traditional finance players.

“I think that’s where we’ve seen much bigger mainstream take up and the real benefits of crypto’s utility being realized. Without clear regulation, that is impossible. I see that as the first step in getting more mainstream adoption.”

Young highlighted Ripple’s expanding basket of services aimed at plugging into an increasingly interconnected financial ecosystem. This is in part facilitated by crucial fiat on-ramps and off-ramps, as well as the development of central bank digital currencies (CBDCs) and stablecoins:

“It’s really a number of different currencies and CBDCs. They’re all going to be coexisting, and that kind of ability to interoperate, to go in and out, is going to be very important.”

Ripple’s ongoing lawsuit with the SEC took an interesting turn in June 2023, as eagerly awaited documents relating to a speech from former SEC corporate finance division director Bill Hinman highlighted contradictory viewpoints on classifying cryptocurrencies as securities.

Magazine: Peter McCormack’s Real Bedford Football Club puts Bitcoin on the map

Hinman documents suggest SEC is the wrong agency to govern digital assets, crypto lawyer says

June 13, 2023 Coin Telegraph

Coin Telegraph

John Deaton, a crypto lawyer and founder of CryptoLaw, told Cointelegraph that released Hinman documents highlight the need for Congress to intervene and provide clarity in governing digital assets.

On June 13, the long-awaited Hinman documents were finally unsealed and released to the public. The unveiled documents offer valuable insights into a significant speech delivered in 2018 by Bill Hinman, the former director of the United States Securities and Exchange Commission’s (SEC) corporation finance division.

In this 2018 speech, Hinman shared his perspective that Ether (ETH), one of the largest cryptocurrencies, should not be categorized as a security. The Hinman documents consist of internal communications within the SEC, providing a comprehensive view of the agency’s discussions and considerations leading up to and following Hinman’s speech.

In light of the recent release of the documents, Cointelegraph reached out to John Deaton, a crypto lawyer and founder of CryptoLaw, to shed some light on the significance of the documents.

In the interview, Deaton emphasized that the documents provide support for Ripple, Coinbase and other entities that have faced what he perceives as unjust targeting by regulators. Deaton suggested that these documents may not only influence public opinion but also potentially shape legislative discussions in Congress, as they raise concerns about the conduct of regulators and the interpretation of existing laws.

In his words: “The documents are what I expected in two ways. One, it helps Ripple, Coinbase, and others being unfairly targeted by regulators playing fast and loose with the law they took an oath to uphold. How much it helps in the courtroom is yet to be seen, but it certainly helps in the court of public opinion and in the halls of Congress. Two, it highlights the massive conflicts of interests and gross appearances of impropriety by William Hinman and Jay Clayton.”

Clayton, an American attorney, previously served as the chairman of the SEC from May 4, 2017 until Dec. 23, 2020.

Regarding the specific impact on the ongoing legal battle between Ripple and the SEC, Deaton noted that “the documents themselves don’t impact the judge’s underlying analysis of whether XRP was offered/sold by Ripple as an investment contract, or XRP’s status in the secondary markets in the United States." However, they do strengthen Ripple’s argument that the speech delivered by Hinman caused market confusion and hindered market participants’ ability to understand what was prohibited under existing regulations. He shared:

“The documents do assist Ripple (and others) in arguing that the speech caused greater confusion in the markets causing market participants to lack adequate notice of what was prohibited by existing law.”

Deaton further highlighted the potential consequences of the documents for Ether and ERC-20 tokens. He suggested that the documents may bolster Ether's position by reducing the likelihood of it being classified as a security by the SEC. He explained:

“I think the speech documents are good for Ethereum ever being called a security by the SEC. It also could help ERC-20 tokens like Dragonchain because those tokens are governed by the Ethereum blockchain and if the SEC claimed the network was sufficiently decentralized then those tokens have even a better fair notice argument than Ripple.”

In response to the overall implications of the documents, Deaton expressed his belief that they underscore the need for Congress to intervene and provide clarity in governing digital assets. He suggested that the SEC may not be the appropriate agency to oversee the crypto industry, given the apparent conflicts of interest and impropriety highlighted by the documents. He shared:

“I think the documents advance the call for Congress to step in and provide clarity and that the SEC is the wrong agency to govern digital assets.”

Finally, Deaton called for an inspector general investigation into why Hinman insisted on delivering the speech despite warnings from the SEC’s Office of the General Counsel and the director of trading markets. Deaton pointed out that Hinman referred to the speech as the “Ether Speech," further raising questions about potential biases and motivations. He noted:

“I think the documents are a call for an IG investigation into why the speech was insisted on by William Hinman. The Office of General Counsel warned against giving Ether a pass and the director of trading markets specifically said the speech would lead to ‘greater confusion in the market.' But Hinman was determined to give it. In his email he called the speech itself the ‘Ether Speech.'

Deaton isn't the only professional who believes there should be an investigation. Stuart Alderoty, Ripple’s chief legal officer, echoed similar sentiments on his Twitter account. He called for an investigation to understand “what or who influenced Hinman, why conflicts (or, at the very least, appearances of conflicts) were ignored, and why the SEC touted the speech knowing that it would create 'greater confusion.'”

13/An investigation must be conducted to understand what or who influenced Hinman, why conflicts (or, at the very least, appearances of conflicts) were ignored, and why the SEC touted the speech knowing that it would create “greater confusion.”
— Stuart Alderoty (@s_alderoty) June 13, 2023

The release of these documents has sparked discussions about the role of regulators, the clarity of existing laws and the need for oversight in the rapidly evolving crypto industry. As the legal battle between Ripple and the SEC continues, the contents of these documents may have broader implications for the regulatory landscape and market participants alike.

Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?

Ripple’s Legal Counsel Calls for Investigation into Former SEC Official William Hinman After Release of Emails

June 13, 2023 The Daily Hodl

Hinman docs unsealed: SEC concerned over ‘Ether is not a security’ statement

June 13, 2023 Coin Telegraph

Coin Telegraph

Hinman risked contradicting himself over the statement Ether isn’t a security, unsealed SEC internal discussion documents show.

Newly released documents showing edits that were made to a 2018 speech given by former director of the Security and Exchange Commission’s (SEC) corporate finance division Bill Hinman suggest the editors were concerned his statement might undermine the idea that Ether (ETH) is a security.

This could risk locking the agency into a position it would find hard to change at a later date, the SEC comments warn.

“Even with the caveats in the sentence, it seems that it would be difficult for the agency to take a different position on Ether in the future,” the edits to the documents read. “Further, the rest of the paragraph strongly implies that the thinking applies to Ether.”

The Hinman documents refer to internal SEC messages concerning a 2018 speech given by Hinman in which he said that while cryptocurrencies such as Bitcoin (BTC) and Ether may start off as securities, it’s possible for them to become something more akin to a commodity once they become sufficiently decentralized.

Ripple CEO Brad Garlinghouse said June 12 that the documents would prove to be “well worth the wait.”

The unsealing of the documents comes amid an extremely turbulent time for the crypto industry. June 13 also sees the federal court hear the SEC’s motion to freeze the assets of Binance.US, following on from a spate of legal action against the exchange.

The SEC first took legal action against Ripple in December 2020, alleging that the sale of its native XRP (XRP) token represented an unregistered securities offering. Since then, Ripple has denied XRP is a security, arguing it does not satisfy the Howey test.

Magazine: Tornado Cash 2.0 — The race to build safe and legal coin mixers

Ripple

Ripple and XRP in the eye of the storm

All eyes on the Hinman documents

Implications of the verdict

The end is near

Bitcoin price analysis

Ether price analysis

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