An important victory for Ripple Labs was made by a judge in the case against the Securities and Exchange Commission (SEC). One Ripple community lawyer called it “a very big win for Ripple,” and the judge agreed.
It was in 2020 that the SEC filed a lawsuit against Ripple and two of its executives, Brad Garlinghouse and Christian Larsen, because they sold unregistered securities.
Sarah Netburn, the presiding judge in the case, turned down the SEC’s request to reconsider putting documents under privilege about a June 2018 speech by the SEC’s then-director William Hinman.
It was in the speech that Hinman said Bitcoin and Ether aren’t real things, like stocks or bonds.
The SEC had previously not objected to those documents being outside of the deliberative process privilege (DPP) because it thought they only talked about Hinman’s personal views and not SEC policies.
This way, the government can’t see some documents in a case from the DPP. This way, the DPP can look at existing policy with privacy in mind, based on the materials in the documents.
The SEC then changed its strategy and said that the speech was about Ripple’s policies, not Hinman’s personal views, and should be protected from public view.
Judge Netburn said that the SEC should not try to backtrack on its own claims.
“The SEC seeks to have it both ways, but the Speech was either intended to reflect agency policy or it was not. Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its own position.”
Today, James K. Filan, a defense lawyer for the Ripple community who has a lot of experience with financial and SEC cases, tweeted: “Judge Netburn’s decision not to reconsider was based on the most important parts of the case.”
This is a very big win for Ripple.
— James K. Filan 90k+ (beware of imposters) (@FilanLaw) April 11, 2022
“The SEC is now in a hurt locker” because of Judge Netburn’s ruling, another Ripple community lawyer and the founder of CryptoLaw said in a tweet today.
This is not just a win for @Ripple and #XRPHolders, but for the judicial system. After the March 2021 hearing, I said we were lucky to get Judge Netburn. Some of you disagree, but I still believe it. The SEC is now officially in a hurt locker. https://t.co/MuSC8ORrd2
— John E Deaton (@JohnEDeaton1) April 11, 2022
There is still a long way to go in this case. The SEC now has two weeks to appeal the decision, and they can do so.
A lot of people in the crypto world are very interested in the progress of this case because it could have a big impact on the future of SEC filings against crypto companies for sales of unregistered securities.
A victory for Ripple could make the SEC less aggressive in its fights against the crypto industry.
However, if the SEC wins, the floodgates could open. Lawyers who know about crypto will have a ready-made business for them.