The SEC vs Ripple lawsuit took an interesting turn on Tuesday after a few portions of Hinaman’s deposition was made public. The deposition documents revealed that Hinman had warned Ripple of XRP’s security status and also asked to stop its sales. This revelation comes as a major blow for defendants in the case who until now seemed to have an upper hand with the deposition.
Ripple: If we’re doing something wrong, how can we fix it?
Hinman: You can’t. Just stop selling XRP until we get our lawsuit finished.
Ripple: That’s extremely unhelpful.
Hinman: I’ll be more helpful when I get back into private practice. Call me then.
-Hinman depo pg.96
— Jeremy Hogan (@attorneyjeremy1) August 17, 2021
Ripple wanted to use Hinman’s comment about Ethereum losing its security status overtime in their favor to prove XRP has grown similarly, but the deposition proved otherwise. The document revealed Hinman’s response as,
Frankly, the one I recall the most clearly is probably the one when XRP came in with a person who had my position before me, as well as enforcement counsel. They were interested in is there a way to restructure what we’re doing to bring it within compliance with the securities laws, and the first thing I said to them as you’re continuing to offer XRP without any kind of restrictions that would apply as a securities offering.
If you want to come into compliance you have to stop doing that, and they understood that.
Will Ripple Go For Settlement Now?
The hype around the deposition of former SEC director for finance made many XRP proponents believe that Ripple has found SEC’s Achilles heel, given SEC objected to the disposition vehemently. The suspicion around Hinman’s deposition briefing grew when SEC filed for a motion to seal the documents. Many believed it could lead to a potential settlement in the case,
SEC has also demanding denial of access to regulator’s privileged internal and interagency communications to defendants claiming it has nothing substantial to aid Ripple’s claims. The plaintiffs in the case also demanded to seal the remaining parts of the deposition documents citing the sensitive nature of the content. XRP proponents came down heavily against the seal motion claiming transparency doesn’t harm anyone.
They are literally arguing that transparency will be a deterrent to public service.
Unbelievable! 🤦♂️ https://t.co/EOFnFiPFEc
— John E Deaton (@JohnEDeaton1) August 17, 2021
It is to be seen whether Ripple would also request for revealing other sections of deposition to build its case.
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