The ongoing court case between Ripple and the United States Securities and Exchange Commission (SEC) has taken a new twist with increased activity around the sealed documents deemed crucial in arriving at the final ruling.
In particular, in a tweet on February 16, defense attorney James Filan revealed that media personality and a senior contributor to Forbes, Roslyn Layton, has filed a motion to gain access to the closely guarded Hinman speech documents.
The petition submitted by Roslyn contended that the press and public possess a fundamental and powerful presumption to access judicial documents, as granted by both the First Amendment and Federal common law. According to the petition, exercising this right is necessary to ensure the court is held accountable.
Furthermore, in the motion, Layton accuses SEC of inconsistency in crypto regulation, pointing out that the agency still needs to release clear guidelines for the sector’s regulations. According to Layton:
“That immense significance has translated into intense public scrutiny of Hinman’s speech, which, given the SEC’s refusal to provide explicit regulatory guidance on cryptocurrencies, constitutes the only instruction anyone within the SEC has offered crypto stakeholders to avoid the wrong end of an enforcement action.”
The motion was also confirmed by Carl Cecere, the owner of Cecere P.C., a law firm devoted to Supreme Court and Appellate practice.
“We just filed this motion for leave to intervene in the SEC v. Ripple Case, which seeks billions in penalties from Ripple based on its cryptocurrency XRP, which the SEC claims is an unregistered security,” Cecere said.
Interestingly, an article on Forbes by Layton, which offered a critical analysis of the perceived unfair treatment of Ripple by the SEC, was inexplicably removed from the website moments after the motion was filed.
What is the Hinman speech?
The Hinman speech, delivered in June 2018 by William Hinman, the then-Director of the SEC’s Division of Corporation Finance, is a crucial document in the Ripple case as it is believed to contain the regulator’s position on the classification of cryptocurrencies as securities.
In the course of the hearing, Ripple lawyers have been pushing for the court to order the SEC to release the documents for review. The company believes that the inferences made in the Hinman speech, which deemed Bitcoin (BTC) and Ethereum (ETH) as non-securities, could also be applied to XRP.
“Public access would therefore be crucial in enabling the public to evaluate the strength of Ripple’s fair-notice defense—because if insiders within the SEC could not understand the speech’s guidance, others outside the agency could not hope to grasp it,” Layton added.
Notably, the SEC has accused Ripple of conducting unregistered security offerings through the sale of XRP tokens.
Questions on SEC’s securities classification
It is worth noting that several legal experts have questioned the SEC’s classification of securities, which has resulted in speculation regarding the potential outcome. In this line, XRP holders’ lawyer John Deaton is of the opinion that the ambiguity in securities classification might lead to the agency losing the summary judgment.
Commenting on the latest filing by Layton, Deaton stated the contents of the documents would eventually be made public.
“It’s also an example of what I meant when I said the Hinman emails will not lead to settlement b/c they eventually will be made public. Can’t put that Jeanie back in the bottle,” he said.
As both parties wait for the final ruling, SEC has also made submissions to seal more documents regarding expert witnesses. The move has received criticism from the crypto players, with Ripple fighting back with an opposing motion.
XRP price analysis
In the meantime, the value of XRP has surged by over 4% in the last 24-hour trading at $0.40 by press time.
The token is now controlling a market cap of $20.34 billion.
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