The latest development in the ongoing Ripple vs. SEC legal battle is likely to grant crypto exchange Ripple an upper hand over SEC. Judge Sarah Netburn has summoned SEC’s former Director William Hinman to testify under oath.
If Ether is a Non-Security, Why Not XRP?
William Hinman will be facing Ripple’s lawyers over his remarks in the 2018 speech in the Yahoo Finance All Markets Summits. The former SEC Director opined that he did not think Ether was security. Hinman’s precise comments declared that the state of Ether, which is based on a decentralized-structured Ethereum network, as it was being offered, did not qualify as securities transactions.
The regulatory watchdog SEC had previously moved to block Hinman’s testimony. The body argued that Hinman, being a state’s high-ranking official, should be exempted from disposition.
Judge Netburn, however, rejected SEC’s motion, citing the exceptional circumstances of the Ripple vs. SEC legal battle. Furthermore, Hinman has previously stated that his speech was only an expression of his personal opinions. Thus, it was difficult to argue with the high-ranking protection privilege if it was only his personal view on the matter.
Ripple’s lawyers plan to capitalize on Hinman’s comments in Ethereum. Similar to Ethereum, Ripple is also a digital asset servicing as a utility within a decentralized network. If with these features Hinman declared Ethereum a non-security, then Ripple’s XRP should be granted the same judgment.
Hinman’s Testimony Could Help Strengthen Ripple’s Fair Notice Defense
Moreover, SEC’s former director could help strengthen Ripple’s fair notice defense. Considering that while serving as SEC’s director of the Finance Division, Hinman thought Ether was a non-security, Ripple could have been led by the same view. Since XRP was operating similar to Bitcoin and Ether, the crypto exchange claims it did not have fair notice that it was operating illegally.
SEC’s former Director William Hinman could face Ripple’s lawyers as early as Monday. Hinman’s testimony could be very significant on how the case turns out. As of now, Ripple and SEC have been going at each other for close to a year.