SEC Vs Ripple: Are The Hinman Memos The Key To The Case?

The U.S SEC vs Ripple dispute has proven to be an important lawsuit for the Cryptocurrency world. As its verdict will eventually define and rectify the commission’s outlook toward the digital assets.

But the SEC’s recent attempts to block the release of documents related to a controversial speech by a former director has drawn widespread scrutiny. The speech in question was by Bill Hinman, where he declared Ethereum is not a security.

The implications of the speech, along with documents surrounding it are posited by Ripple as a key component to its case with the SEC.

Hinman alleged to have serious conflict of interest

The deposition mentions that Hinman sent the speech for a review to SEC Chairman Jay Clayton among other staff. On being asked whether Hinman sent it to any other person or entity.

The Hinman replied that ‘He didn’t feel like the input was going to be worth the extra delay’.

Attorney John Deaton, who is representing Ripple holders, suggested that maybe Hinman didn’t send the speech to Hester Peirce or any other SEC commissioners. He also mentioned that if Hinman would have done so then it is possible that the administration would have suggested not to pick the winners.

Meanwhile, Eleanor Terrett, a FOX journalist, indicated that the case proceedings might speed up now. In a Twitter thread, she pointed out that the whole commission except Clayton was excluded from the 68 speech draft. However, she has also reported that Clayton provided input on the speech prior to its delivery.

SEC’s Ethics Counsel warned Hinman over this conflict

In June 2018, Hinman spoke that the Ethereum network’s structure and sales of its native token Ether (ETH) won’t come under ‘securities’.

She informed that SEC’s Ethics Counsel was also left off the email distribution list. Earlier, the Counsel had cautioned Hinman over his financial conflict of interest regarding Simpson Thacher & Bartlett (STB). Tamara Brightwell, then Deputy Chief Counsel of the Corporation Finance wing was on the list. Terrett confirmed Hinman deferred Brightwell over the screening for any dispute of interest involving STB or other old links.

She added that STB is a member of the European Economic Area (EEA). It pays for subscriptions to gain access to ETH ecosystem related content and contracts. Terrett raises the question that whether Hinman’s speech here counts him as involved in an event that directly affects STB?