[NEWS] Key documents in the lawsuit over XRP securities, the "Hinman Papers," are released

On the 12th, a speech by William Hinman, former head of the SEC's Division of Corporation Finance, which was one of the points of contention in the ongoing trial over the securities issue of the cryptocurrency XRP, was made public.

This document, also known as the "Hinman Papers," was requested by the U.S. company Ripple to be made public as important evidence showing the SEC's official position. In response, the SEC asked the court to keep it confidential for information protection reasons, but was ordered to submit it in September last year. The release of the Hinman Papers temporarily boosted the price of XRP.

In a speech in June 2018, Hinman said, "Some cryptocurrencies, such as Bitcoin and Ethereum, are not securities." As one of the reasons for this, he indicated his recognition that "sufficiently decentralized tokens are not securities."

The focus is on what kind of exchanges took place between the SEC staff and the speech materials before they were completed.

Ripple's Chief Legal Officer Stuart Alderoty said in response to the public exchange that "Hinman's speech contained an analysis without legal basis, deviated from the Howey test factors, exposed regulatory gaps, and ignored multiple warnings that could have caused market confusion and even greater confusion."

In the exchange, SEC staff also expressed concerns about Hinman's draft speech materials. In particular, there were points of disagreement over the reference to Ethereum's securities status, and one staff member suggested that "if you are taking a position that it is not a security, you should use strong language. If you want to avoid a definitive opinion, you should use language similar to that used in the explanation of Bitcoin."

It was also revealed that the staff member pointed out that "even if annotations are added, it may be difficult for the SEC to take a position on Ethereum that differs from this speech in the future."

This also suggests that the SEC staff were asking Hinman to be cautious about Ethereum's securities status.

Furthermore, it was revealed that prior to the speech, Hinman had plans to discuss with Ethereum founder Vitalik Buterin whether his understanding of the role of the Ethereum Foundation differed from his own, and whether ETH should be regulated as a security.

In light of this history, Aldeloti said, "We need to reinvestigate and clarify what and who influenced Hinman, and why his concerns were ignored despite various concerns. Why did the SEC promote the speech knowing that it would 'cause greater confusion.'"

In December 2020, the SEC filed a lawsuit against Ripple over XRP securities. While some say that the release of this document has increased the likelihood of a ruling in Ripple's favor, others point out that the impact will be limited, so the outcome of the trial remains unclear.

Reference:Aldeloti's Twitter
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