- SEC asks court to suspend subpoena pending decision on SEC motion against Ripple’s fair notice defence
- Attorney: Defendants who want facts on SEC assertion of deliberative process privilege can ask SEC
- SEC internal communications on Bitcoin, Ethereum, and XRP are most controversial area of lawsuit
The U.S. Securities and Exchange Commission (SEC) seems intent on stopping William Hinman from testifying in the SEC v. Ripple (XRP/USD) lawsuit. Hinman is a former director of the commission’s Division of Corporation Finance, Forkast News reports. The SEC has asked the court to suspend subpoena procedures to Hinman until after it rules on the SEC’s motion against the crypto company’s fair notice defence. Ripple has alleged that the SEC did not give them fair notice that their crypto coin transactions were unlawful. The former director’s deposition would be irrelevant if that motion were granted.
Attorney: Ripple is ‘wrong’ to feel entitled to Hinman’s testimony
Commission attorney Ladan Steward has said Ripple is ‘wrong’ to feel entitled to Hinman’s testimony in response to their claim that he had unique first-hand knowledge about SEC’s adoption or approval of his speech on crypto regulation. He gave this now-famous speech back in 2018. According to the attorney, defendants who want facts surrounding SEC’s assertion of privilege of deliberative process can simply ask the commission. Ripple wouldn’t be able to get at more detailed info from the former director than they could from the commission’s records of internal communication related to his speech.
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According to a letter by Stewart:
“Defendants want Director Hinman to sit through hours of questioning, where an SEC lawyer repeatedly objects and instructs him not to answer, just so the defendants can use the deposition transcript to argue to this Court that the SEC is not entitled to assert a deliberative process privilege. This strategy is not an exceptional circumstance justifying such a deposition.”
Most controversial areas of lawsuit: Internal communication on BTC, ETH, XRP
The commission’s internal communications on Bitcoin (BTC/USD), Ethereum (ETH/USD), and XRP are the most contented area of the lawsuit. The issue of whether XRP transactions are “investment contracts” under the Securities Act of 1933 is at the core of the conflict.
Senator calls SEC out on lack of crypto regulation
Senator Elizabeth Warren, chair of the US. Senate Committee on Banking, Housing, and Urban Affairs, called SEC out on the absence of crypto regulation in a letter to SEC Chair Gary Gensler, asking him for details on the SEC’s authority to regulate crypto exchanges. The SEC did not mention crypto regulations in its most recent regulatory agenda.
Popularity of XRP waned, but only in the US
In the aftermath of the lawsuit, Kraken, Coinbase, and a number of other US-based exchanges suspended XRP trading or delisted the coin altogether. However, the lawsuit has not affected operations outside the US. Ripple is still traded in many parts of the world and is quite popular in Asia. Its market cap ranks it as the sixth-largest crypto.