On May 16, a federal judge rejected the U.S. Securities and Exchange Commission's (SEC) attempt to seal documents related to William Hinman's 2018 speech on cryptocurrencies and securities in the Ripple lawsuit filed in late 2020.
SEC filed a motion to seal a number of documents, including the Hinman Speech records. William Hinman, former SEC Corporation Finance Division director reportedly stated during the 2018 Yahoo Finance All Markets Summit that Ether is not a security.
Obviously, the "Hinman documents" are not in line with the SEC’s lawsuit against Ripple Labs, which wants Ripple’s cryptocurrency XRP to be officially declared a security. The motion filed by SEC was intended to help the Commission hide the controversial documents. SEC also requested that all references to the Hinman Speech Documents be "redacted" from the defendants’ filings.
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These documents were first ruled to be turned over to Ripple Labs in January 2022. Despite the Commission's efforts to conceal them, District Judge Analisa Torres believes they are relevant to the ongoing litigation and therefore cannot be sealed, even though SEC is permitted to redact names and personal information of individuals referenced in the documents.
"As Judge Netburn found in her order dated January 13, 2022, the Hinman Speech Documents are not protected by the deliberative process privilege because they do not relate to an agency position, decision, or policy," Torres wrote on May 16 in Document 819 on the case, adding, "Therefore, sealing these documents would not be related to preserving 'openness and candor' within the agency, nor would such an interest be substantial enough to outweigh the strong presumption of public access."
Meanwhile, the judge allowed Ripple to redact a number of documents, including those related to business information and financial reports.
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The outcome of the SEC’s lawsuit against Ripple will have serious implications for other cryptocurrencies, as it may define how they are viewed from a legal perspective as well. For Ripple, the lawsuit has already had a negative impact by restricting access to XRP reserves, which significantly affected the company's liquidity and prevented it from attracting new customers, especially in the US. In addition, many crypto exchanges had to suspend XRP trading or delist the token completely because of the uncertainty over its legal status.