In a recent development in the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), previously undisclosed emails have been released, shedding light on internal deliberations within the SEC regarding the regulatory status of Ethereum (ETH). The emails, published by Ripple, are tied to the 2018 speech by former SEC Director of Corporation Finance, William Hinman, who stated that Ether did not appear to be a security. However, these emails have sparked discussions about the clarity of the speech and its implications for the regulatory treatment of digital assets.
The released emails show SEC officials engaged in conversations about the language used in Hinman’s speech, with some expressing the need for clearer statements regarding Ether’s classification as a non-security. Former SEC Director of Trading and Markets, Brett Redfearn, suggested that the language should be stronger to explicitly state that Ether is not a security. Additionally, there were discussions on ensuring consistency with Bitcoin’s treatment regarding disclosure requirements. Valerie Szczepanik, the current head of the SEC’s FinHub group, emphasized —in 2018— the importance of leaving room for discussion and keeping the speech less detailed to generate constructive dialogue.
Ripple CEO criticizes SEC’s conduct and lack of regulatory clarity
The release of the SEC emails prompted a strong response from Ripple CEO Brad Garlinghouse, who took to Twitter to express his frustration with the regulator. Garlinghouse criticized the SEC’s lawsuit against Ripple and its co-founder Chris Larsen, labeling it a “politically-motivated overreach.” He highlighted how the SEC weaponized the need for regulatory clarity, confusing the industry. Garlinghouse’s reaction came after Ripple’s chief legal officer, Stuart Alderoty, scrutinized the newly revealed emails and drafts related to Hinman’s speech, urging swift action to address potential conflicts of interest and remove the speech from the SEC’s website.
The impact of these emails on the SEC’s lawsuit against Ripple is yet to be fully understood. However, the release has already generated increased attention within the crypto community. The XRP price experienced a notable increase following the publication of the emails, indicating the market’s reaction to this latest development in the high-profile legal battle. The ongoing Ripple-SEC case attracts significant attention as industry participants closely monitor the outcome, hoping for more regulatory clarity in treating digital assets.
