The cryptocurrency world is buzzing with the latest news about XRP, the native token of Ripple Labs. XRP has been at the center of a legal battle with the U.S. Securities and Exchange Commission (SEC), which accuses Ripple of selling unregistered securities worth $1.3 billion.
The SEC’s case hinges on whether XRP is a security or not, a question that has been debated for years in the crypto community. One of the key pieces of evidence that Ripple hopes to use in its defense is a speech made by William Hinman, the former director of the SEC’s Division of Corporation Finance, in 2018.
In his speech, Hinman stated that he did not consider Bitcoin and Ethereum to be securities, because they are decentralized networks that operate without a central authority.
Ripple contends that Hinman’s speech reflects the SEC’s official position on Bitcoin and Ethereum and that XRP should be treated similarly since it also has a high degree of decentralization and no single entity controls it. The SEC, however, maintains that Hinman’s speech was only his personal opinion and not a formal guidance or policy.
The SEC Vs. Ripple Vs. Hinman
To prove its point, Ripple requested the court to order the SEC to produce documents and communications related to Hinman’s speech, as well as his interactions with other SEC officials and external parties. The SEC initially resisted this request, claiming that such documents are privileged and irrelevant. However, after several rounds of negotiations and court hearings, the SEC agreed to release some of the documents to Ripple and the public.
The release of the documents today did not explicitly refer to XRP but mainly discussed the criteria for determining whether an asset is a security. However, this news caused Ripple’s token to surge by nearly 6% and reach $0.55 in a short time. The token is now trading at $0.53, according to CoinGecko data.
The documents reveal that Hinman consulted with several SEC staff members and external experts before making his speech and that he received feedback and suggestions from them. The documents also show that Hinman received an email from an unnamed person who wrote: “We do not need to see a need to regulate Ether, as it is currently offered, as a security.”