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Ripple v. SEC case update as of June 12, 2023

Ripple v. SEC case update as of June 12, 2023

With the release of the controversial documents just one day away, the cryptocurrency industry continues to follow the people close to the legal battle that the United States Securities and Exchange Commission (SEC) is waging against blockchain company Ripple for any insights into the case.

In this context, legal expert and amicus curiae for Ripple, John E. Deaton, commented on the possible effect of the emails’ public release on this case, as well as other lawsuits that the regulator has initiated against cryptocurrency businesses in the meantime, according to the tweet he posted on June 11.

What Hinman release means

As he explained, the documents referring to a speech that former SEC Division Director William Hinman delivered at a summit in 2018, where he said that Ethereum (ETH) and Bitcoin (BTC) were not securities, could have an even more significant effect on the public and relevant policymakers:

“The emails won’t 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.”

At the same time, Deaton predicted that “the emails will highlight Hinman’s massive conflicts of interest” and that “people will ask: ‘Then why give the speech?’” based on the conclusions he drew with the help of the crypto community in late 2022.

As a reminder, in December 2022, he rallied his followers on Twitter to try and help figure out the redacted parts of the controversial document, particularly the comments by Brett Redfern, former SEC Director of Trading and Markets, as “something that gives the SEC prosecutorial options.”

Indeed, most agreed that one of the phrases referred to either “market confusion” or “more speculation,” indicating that Redfern had warned that the speech would cause “market confusion” or “more speculation,” and Deaton more recently reiterated the question, “So why give the speech?”

Other issues with SEC’s position

On June 11, he shared the SEC’s response to his Writ of Mandamus he had filed in January 2021, in which the regulatory agency admits “that the Court decides if the SEC’s claim or theory is even valid,” to which Deaton added that “the SEC calling an asset a security does NOT mean it is a security.”

Specifically, as the excerpt reads:

“Thus, the Commission’s enforcement proceeding in the Southern District of New York brought under the Securities Act supplies the exclusive method for testing the validity of the Commission’s complaint against Ripple.”

Meanwhile, the XRP token, which is at the center of this widely publicized case, was at press time changing hands at the price of $0.51, up 1.20% in the last 24 hours but down 3.77% across the previous week, as it recorded a more notable gain of 20.12% on its monthly chart, as per data retrieved on June 12.

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