The last couple of weeks in the SEC v. Ripple case have witnessed the San Francisco-based blockchain payments firm make its intention to have former Director of SEC’s Division of Corporate Finance, William H. Hinman, testify in court known to the whole world.
Now, the attorneys representing Ripple and co-defendants CEO Brad Garlinghouse and Executive Chairman Chris Larsen have notified the presiding Magistrate Judge Sarah Netburn of the District Court for the Southern District of New York that the said deposition has been postponed to mid-July. The defendants had initially requested to depose Hinman on June 30.
Ripple Wants To Depose Hinman On July 19
If any of the parties involved in a lawsuit requests a deposition, they are required to provide a written notice informing the other parties of the time and place of the testimony. In a July 9 letter, Ripple indicated that Hinman’s deposition has been re-noticed to July 19 to accommodate his availability.
Here, it’s worth pointing out that Hinman’s deposition is still not set on stone. Shortly after Ripple requested to depose a high-ranking officer at the United States Securities and Exchange Commission (SEC), the regulatory agency swiftly filed a motion to quash the deposition in question.
On July 8, the SEC followed up with another reply to support the motion to dismiss, arguing that the defendants have not sufficiently demonstrated that Hinman has “unique first-hand knowledge” of sales of XRP as previously stated. The regulator explained:
“The only topic on which defendants even claim (incorrectly) that Director Hinman has “unique first-hand knowledge” is the circumstances under which he gave his [Ether] speech and the agency’s treatment of the speech after the fact.”
Interestingly, Hinman said ether wasn’t a security in his 2018 speech — a key point that could prove critical for Ripple as it seeks to boost its fair notice defense as well as have him testify in court under oath. Ripple’s defense lawyers are also looking at Hinman’s communications with market players, exchanges and third parties, describing it as “relevant and discoverable” — and potentially damning.
Judge Netburn is yet to announce her ruling on SEC’s motion. If she grants it,
Ripple will not be able to depose Director Hinman and hear his testimony and vice versa.
Basically, Ripple is asking Judge Netburn to give her decision denying the regulatory body’s motion to quash before July 19 so they can question Hinman on the said day.
As we previously covered, the SEC argued in an earlier motion that granting Ripple’s request to depose high-ranking government officials should be dismissed. Approving it, to say the least, could open a fresh can of worms that would discourage qualified officers from taking office at the SEC.
In its latest reply, the SEC also asked the defendants to give an instance where the deposition of an SEC official of Hinman’s rank was allowed. According to the regulator, such depositions have always been quashed by the courts.
That being said, Jeremy Hogan, a lawyer in the XRP community, suggested that the SEC is speculating what Hinman’s deposition will be and basing its argument on that.
Hogan believes there’s a high chance the Judge will allow Hinman’s testimony but with some restrictions.
All in all, this case is slowly turning out to be the crypto trial of the century. Not only is Ripple (and XRP’s) future at stake but the case will set a precedent for the whole cryptocurrency industry.