‘XRP holders need to know this if Hinman testifies,’ says the Ripple-SEC complaint

  • The Securities and Exchange Commission has been pursuing Ripple Labs and its executives in court since December
  • Deaton also mentioned a quick, but not an exhaustive assessment of what all XRP and crypto-holders deserve to know if William Hinman is allowed to speak under oath
  • The financial regulator also said that it does not speak through its staff or individual commissioners, but rather through enforcement measures, thus everything Hinman says is considered deliberative

Since December, the US Securities and Exchange Commission has been pursuing Ripple Labs and its executives in court. In the most recent development in the case, Judge Sarah Netburn has arranged a phone conference for July 15 at 3:00 p.m. to examine the US Securities and Exchange Commission’s [SEC] move to suppress former SEC Division of Corporation Finance Director William Hinman’s deposition. 

SEC attorney Ladan Stewart stated in the agency’s request that Ripple had not met the heavy burden of showing unusual circumstances sufficient to support such a deposition. Furthermore, the San Francisco-based business failed to demonstrate Hinman’s unique first-hand knowledge of XRP offers and sales, according to the regulator. Needless to say, the blockchain business strongly refuted this claim, as did potential intervenors represented by Attorney John Deaton, including XRP holders.

In a recent blog article, John E. Deaton, Managing Partner of the Deaton Law Firm, said the following that Hinman is no longer a government officer in a high-ranking position. He is an individual who lives in his own home. Simpson Thacher would surely give Hinman sufficient time off to answer some questions after spending millions of dollars in him while he was at the SEC. 

Deaton also mentioned a quick, but not exhaustive assessment of what all XRP and crypto-holders deserve to know if William Hinman is allowed to speak under oath. These problems include, among others, a potential conflict of interest related to Hinman’s work with Simpson Thatcher, the odd timing of Coinbase’s ETC listing, and Hinman’s meeting with the Ethereum Foundation.

The financial regulator also said that it does not speak through its staff or individual commissioners, but rather through enforcement measures, thus everything Hinman says is considered deliberative. The SEC informed the Judge that if Hinman was deposed, the deliberative process privilege, often known as Exemption 5, would be invoked. 

Judge Netburn noted that this was not a typical SEC enforcement action and that Hinman’s deposition would not open the floodgates.  She went on to say that the issue involves major policy choices in our markets, the amount in dispute is large, and the public’s interest is strong in this case. The SEC accused Ripple supporters, dubbed the XRP Army, of making false comments on social media against the company’s leadership in late June. 

The regulator sought the meeting to consider quashing Ripple’s move to subpoena Hinman, claiming that it would create a precedent for a parade of demands for the testimony of high-ranking government officials and disrupt government operations. Hinman touted the SEC’s record as being receptive to innovations like cryptocurrencies and blockchain without the need to change the existing regulatory framework in his departing address in November 2020, soon before he departed the agency.

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