A motion from the United States securities regulator to seal records of its internal deliberations following a speech by former director William Hinman has been denied — a move that has been seen as a win for the Ripple and crypto community.
In the June 2018 speech, the former Securities and Exchange Commission corporation finance division director stated that Ether (ETH), the native token of the Ethereum blockchain, is not a security.
The SEC filed the motion on Dec. 22 to seal the internal emails, text messages and expert reports that followed Hinman’s speech, arguing that its mission outweighed the “public’s right” to access documents that have “no relevance” to the court’s summary judgment decision, among other arguments.
However, Judge Analisa Torres for the U.S. District Court ruled that the documents are “judicial documents” subject to a strong presumption of public access.
The Hinman Speech Documents “would reasonably have the tendency to influence [the Court’s] ruling on a motion," she added.
Another win for transparency! Unredacted Hinman emails to be publicly available soon - stay tuned as the lawyers work through the mechanics to make that happen. https://t.co/o6puPypRHd https://t.co/qmaLVeQaP8— Brad Garlinghouse (@bgarlinghouse) May 16, 2023
Judge Torres said the court has also rejected the SEC's argument that sealing the documents is necessary to preserve "openness and candor" within the SEC, stating:
"The Hinman Speech Documents are not protected by the deliberative process privilege because they do not relate to an agency position, decision or policy."
While the court has ruled the Hinman Speech documents will be made public, it has granted the other two requests from the SEC that asked for the redaction of names and identifying information of SEC experts and XRP (XRP) investor declarants, as well as personal and financial information of the defendants.
The court also denied certain motions to seal from Ripple, including references linking Ripple's revenues with XRP sales and the amount of compensation offered to trading platforms, among others.
Related: Watchdog sues SEC over FOIA access to docs on potential crypto conflict of interest
Ripple has considered the speech a key piece of evidence in its ongoing legal battle with the SEC, which alleges that sales of Ripple's XRP violated U.S. securities laws.
The price of XRP spiked on the news, jumping around 2.6%. It is currently trading at $0.43.
Hinman Speech docs will not be sealed; p.5. Judge makes clear they should be open regardless of their impact in a decision. States it neither stifles SEC deliberation nor is the SEC's "prophylactic" concern it could be priveleged in the future convince.https://t.co/tCS5cpgsQO pic.twitter.com/73YXhZszNY— WrathofKahneman (@WKahneman) May 16, 2023
Magazine: Crypto regulation — Does SEC Chair Gary Gensler have the final say?
Update (May 16, 11:05 pm UTC): This article has been updated to include background information and further details from the May 16 court filing.