The U.S. Securities and Exchange Commission (SEC) is deliberately smirching crypto regulations.
This according to Ripple Labs’s General Counsel Stu Alderoy who in a new commentary published in Fortune, discussed the consequences of the infamous speech made by a former SEC Director, William Hinman, in 2018.
In the speech, extremely important for Ripple’s defense in its ongoing court case with the SEC Hinman noted that Ethereum (ETH) is not a security, contradicting the SEC guidelines.
Whether intended or not, Henman’s words and consecutive meetings with SEC officials, affected the crypto markets and Ripple’s direction, Alderoy explained:
“Despite disclaimers that the speech was Hinman’s personal opinion and ‘not necessarily that of the Commission,’ the market took Hinman’s speech to heart. For Ripple, Hinman’s speech affirmed the conclusion that XRP – a cryptocurrency that exists on an open, permissionless, decentralized blockchain ledger – was a commodity and/or a virtual currency. Certainly not a security.
Ripple uses XRP in its products as a bridge to make cross-border payments faster, cheaper, and more transparent for its customers – and is one of many developing on the XRP ledger. Following Hinman’s speech, Ripple met several times with key officials at the SEC, believing that rational minds would all agree on XRP’s status as something other than a security.”
Although judge magistrate Sarah Netburn, who presides the SEC lawsuit, considered Hinman’s speech his personal opinion, the SEC legal team recently claimed the speech was aimed at providing market guidance:
“Now we know Judge Netburn has already ruled that, at least for discovery purposes, Hinman’s speech was his personal opinion. So the SEC can now argue it’s not relevant to anything, and that’s fine, but we know that now hurts the SEC in those discovery motions, so there was a trade-off there. But the SEC attorney was trying really hard today in arguing various positions in order to try to win this motion, which was probably not really possible to even win…
The judge asked, ‘Is the SEC taking the position now that the speech reflected the Division of Corporate Finance’s position?’ And the SEC attorney said ‘Yes.’ Now she tried to equivocate a little bit after that, but the first and the direct answer was ‘Yes.’”
In a recent briefing, crypto legal expert Jeremy Hogan, who has been reporting on Ripple Labs court case with SEC from day 1, the regulator has one significant error, which was to use different strategies in its fight to have the Hinman emails denied.
Alderoy concluded his publication by offering the SEC some advice:
“In the four years since Hinman’s speech that did nothing but muddy the crypto waters, the U.S. still desperately needs clear rules of the road that embrace innovation while protecting consumers and the integrity of markets.”
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Source: Igaming
