SEC v. Ripple: SEC caught erasing documents relevant to XRP lawsuit

Rick Steves

The transcript is included in the most recent SEC motion in regard to the privilege dispute between the agency and Ripple and individual defendants.

The SEC has filed its opposition to Ripple’s and the Individual Defendants’ Motion challenging the SEC’s improper assertion of the Deliberative Process and other privileges.

The agency’s response to the privilege dispute follows an extensive and frustrating back and forth between both parties as they don’t see eye to eye in terms of what constitutes privileged information.

This has led Ripple’s lead counsel Matthew Solomon to send a letter to Judge Sarah Netburn and request her help in the discovery dispute. Fact discovery is coming to an end but many documents are yet to be delivered (lawsuit agenda).

In regard to the recently filed opposition to Ripple’s motion, the SEC argues the deliberative process privilege (DPP) is a critical governmental privilege designed to promote the quality of agency decisions by preserving and encouraging candid discussion between officials.

“The Court should not override that privilege and punish frank governmental deliberations, particularly where the internal pre-decisional, deliberative material Defendants seek, which they never saw or knew about, is not relevant to any claim or defense”.

“Defendants have already sought and obtained an extraordinary amount of discovery from the SEC. Yet, Defendants now claim that privileged, non-public SEC communications about the regulation of digital assets (not just XRP), are somehow so relevant that the SEC’s important deliberative privilege should be overridden”, the plaintiff argued.

“Meanwhile, Defendants have moved to strike on the record the most probative, relevant evidence they have obtained from their SEC discovery: former SEC Division of Corporation Finance Director William Hinman’s deposition testimony that he met with Ripple representatives and told them that he considered Ripple’s sales of XRP to be sales of securities and that Ripple should stop its unregistered sales”.

“The theory behind Defendants’ Motion appears to be that non-public and privileged comments by SEC employees that Defendants never saw, including about digital assets other than XRP, are relevant, but what Director Hinman told Ripple’s representatives
about XRP is not”, the SEC added.

The abovementioned filed motion contains parts of the deposition of ex-SEC Director William Hinman, a much-discussed topic for its potential to change the course of the lawsuit.

Mr. Hinman gave the thumbs up to Ether as a non-security in 2018, resulting in a euphoric market no longer afraid of an SEC complaint about its initial coin offering. The lawsuit could and still can trigger a move against Ethereum.

Ripple confronts SEC for deleting relevant information

The William Hinman deposition transcript seems to indicate that the SEC tried to delete subtopics relevant to the Ripple lawsuit. On page 254, Ripple counsel Reid Figel claimed “it was deleted” and pointed the finger at SEC Special Counsel Michael Seaman.

“What’s the basis of that understanding, Reid?”, SEC lead counsel Jorge Tenreiro asked.

“Our review of the metadata. If you look to — depends on how you present it, but if you go to the second document, it says on some version of it deleted by Michael Seaman”, Mr. Reid replied.

Then, the SEC counsel suggested he asked William Hinman “if he directed Seaman to delete it. I mean, does he remember that”. The former SEC director answered the question with “I don’t recall directing him to do that.”

The deleted portion of the SEC document on page 96 was William Hinman’s answer to the question “Other than the issues with respect to Ripple, can you identify any other lawyers that came to you, not seeking a no-action letter, but seeking guidance with respect to transactions in digital assets?”

Mr. Hinman: “You call ten different law firms, they give you ten different answers, each of them has their own particular spin. It’s like the white light of your speech went through a prism and came out in ten different colors of legal advice.”

This is the latest update to the lawsuit, which recently saw Ripple explaining to the Judge why it refuses to hand over its internal Slack messages to the SEC.

Both parties’ strategies were analyzed by attorney Jeremy Hogan over the weekend ahead of the “Hell Week” as fact discovery ends August 31.

Read this next

Digital Assets

SEC bypassed commission vote in approving Ethereum ETFs

The Securities and Exchange Commission’s (SEC) Trading and Markets Division has approved several spot Ethereum exchange-traded funds (ETFs) using delegated authority, rather than a vote by the full commission.


BlockDAG Presale Draws Massive $32.4M Hinting At its 30,000x ROI Potential, Overshadowing Retik Finance at Bitmart

Learn why BlockDAG’s innovative strategies and $32.4M presale success are making millionaires, overshadowing Retik Finance’s struggle on Bitmart.

Institutional FX

Malaysia’s exchange launches API for onboarding retail investors

“The Exchange actively listens to the evolving needs of our customers. This initiative is key in delivering on our commitment towards greater customer-centricity. We will continue to work closely with our POs and introduce service innovations to attract more investors, bolstering the competitiveness of our market.”

Fintech, Uncategorized

LiquidityBook welcomes JonesTrading to LBX Post-Trade Hub

“As we near the T+1 deadline, we are excited to continue helping firms achieve straight-through processing in addition to delivering new enhancements to our comprehensive range of cloud-native buy- and sell-side trading solutions.”


Should I Invest Today? Which Altcoins Could Make 2-5X Profits Amid the Latest News?

Investing in cryptocurrencies can be a journey full of surprises, given their volatile nature.

Executive Moves

Bakkt promotes Ray Kamrath to CCO of Crypto

Bakkt has promoted Ray Kamrath to Chief Commercial Officer of the company providing custody, trading, and onramps to the crypto space.

Industry News, Uncategorized

HSBC relocates US headquarters to The Spiral, New York

HSBC has opened its new U.S. headquarters at The Spiral, a renowned office building in New York City’s Hudson Yards neighborhood.


Best Cryptos to Buy Before the Real Bull Run Kicks Off

With the bull run of 2024 already underway, investors are eager to identify cryptocurrencies that promise significant growth.

Market News

This time is different – is it?

The stock market wants lower interest rates – or rather, it has been expecting them for months. Justified? The US economy looks very robust, so higher interest rates would actually be the order of the day.