SEC v. Ripple: Judge orders controversial deposition of ex-SEC Director

Rick Steves

The deposition will take place on Monday, July 19.

Judge Sarah Netburn has ordered William Hinman, former SEC Director of Corporation Finance, to depose next Monday.

Ripple’s subpoena had found great resistance from the Securities and Exchange Commission as his deposition could be key to clarify the SEC’s policy on digital assets, despite the agency stating his speech in 2018 regarding the nature of Ethereum and Bitcoin was his personal views only.

The Judge ruled in favor of Ripple Labs as “this is not a run of the mill enforcement case by the SEC” and because SEC v. Ripple is unique and the public interest in the resolution of this case is substantial.

She also said she is “very much disinclined” to have Mr. Hinman sitting twice and admitted that the SEC will likely direct Hinman not to answer much of the questions. Still, the Judge asked both parties to work out the scope of the deposition.

During the hearing, Judge Netburn asked why the SEC said that privilege would be breached if the scheduled deposition is about a public speech based on his personal views and not on behalf of the SEC, as the agency argued.

Hinman’s 2018 ETH speech was “the central question” for the Judge. The SEC admitted that its staff participated in the drafting of the speech. Ripple’s counsel added that ex-SEC Chair Jay Clayton told Congress that speech was an example of transparency on how the agency was treating cryptocurrencies.

The SEC argued that anything Hinman ever said is privileged as “deliberative” and told the Judge the deliberative process privilege would be invoked if Hinman was deposed.

Despite the ruling going in favor of Ripple, the blockchain firm’s counsel complained that the SEC is “withholding every part of every internal memorandum” citing privilege and its position is “untenable” and “prejudicing” the defense.

Ahead of the hearing, John E. Deaton, the attorney who has previously filed a Motion to Intervene in the name of XRP holders, published an opinion piece with his line of questioning for the deposition.

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