Ripple has been involved in a legal battle with the SEC since December 2020. The SEC accuses Ripple and its current and former CEOs of raising $1.3 billion through an unregistered securities offering by selling XRP to retail investors. The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has reached a new milestone, as the court denied the SEC’s motion to seal internal documents related to a speech by its former director William Hinman.
Ripple denies that XRP is a security and argues that it is a decentralized digital asset that operates on a peer-to-peer network.
Ripple’s Small but Significant Win
Recently, Ripple has claimed a win for transparency in the lawsuit, as the court ordered the SEC to unseal some internal emails of its former director of corporation finance, William Hinman. Hinman had previously stated in a 2018 speech that Bitcoin and Ethereum are not securities, but did not mention XRP.
Ripple hopes that the emails will reveal Hinman’s views on XRP and whether he had any communications with third parties about the status of XRP.
Ripple’s CEO Brad Garlinghouse celebrated the court’s decision on Twitter, saying that it was “a win for transparency” and “a step towards accountability.” He also criticized the SEC for “trying to hide behind FOIA exemptions” and “withholding information”.
Garlinghouse and his co-defendant Chris Larsen have also filed motions to dismiss the SEC’s claims against them, arguing that they did not violate any securities laws by selling XRP.
SEC Doubles Down
The SEC, on the other hand, has maintained its position that Ripple and its executives violated the securities laws by selling XRP without registering or seeking an exemption.
“The SEC’s complaint alleges that defendants failed to register their offers and sales of XRP or satisfy any exemption from registration, in violation of the registration provisions of the federal securities laws,” the agency said in a press release.
“The registration requirements are designed to ensure that potential investors – including, importantly, retail investors – receive important information about an issuer’s business operations and financial condition,” it said.
The outcome of the lawsuit could have significant implications for the cryptocurrency industry, as it could set a precedent for how digital assets are regulated in the U.S.
