Ripple scores small goal: Former SEC director William Hinman has to appear in court

San Francisco-based fintech firm Ripple has won another small victory in the ongoing battle against the US Securities and Exchange Commission.

District Court Justice Sarah Netburn rejected the SEC’s proposal on Thursday in New York to block the SEC’s former director of corporate finance, William Hinman.

In June 2018, Hinman supported in a keynote that based on his understanding of the Ethereum network and its decentralized structure, “the current supply and sale of Ether are not a stock exchange”.

The latest rebuttal could back up Ripple’s claim that XRP is not a security. Without an appeal from the SEC, Ripple could ask Hinman to testify about the reasons for his decision to join ETH at the time and then try to apply this rule to XRP.

Ripple has argued that the SEC cannot regulate XRP as a security because it is a medium of exchange for international and domestic transactions.

The SEC contested the subpoena, saying the interrogation “will subject senior government officials to filings on any law, regulation, or policy they have consulted or stated and subsequently faced with an enforcement action.”

The regulator also argues that it does not speak through individual employees or agents, but only through enforcement action, so anything Hinman ever says is subject to a process of “regulatory considerations.” The SEC informed the judge that this privilege, also known as “Exception 5,” would be used if Hinman was removed from office.

Judge Netburn stated that this was not a “common SEC enforcement case,” adding that Hinman’s testimony would not set a negative precedent.

In December 2020, the SEC filed a lawsuit against Ripple alleging that the company, CEO Brad Garlinghouse and co-founder Chris Larsen, used the XRP tokens to conduct a “continuous, unregistered offering of securities for digital assets.”

In late June, the SEC accused Ripple fans, the XRP Army, of making “false statements” against the agency’s leadership on social media. The agency moved to dismiss Hinman’s subpoena, claiming that it would set a precedent for “a series of testimony by senior government officials” and disrupt their government operations.

In a speech in November 2020 shortly before leaving the agency, Hinman cited the SEC filing as a door opener for technologies such as cryptocurrencies and blockchain, without the current regulatory framework having to be revised.

Annie

According to Cointelegraph

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page