SEC v. Ripple: SEC “rebukes” own Commissioners views ahead of William Hinman deposition

Rick Steves

Ripple has scored a series of wins in recent weeks. The long-awaited deposition of William Hinman, ex-SEC Director of Corporation Finance, is scheduled for tomorrow.

The SEC v. Ripple lawsuit has seen a significant turn of events last week in the form of a public statement by SEC Commissioners Hester Peirce and Elad Roisman.

The top officials officially admitted to the lack of clarity surrounding the digital asset space. Deemed a “gift from the heavens” by Jeremy Hogan, a lawyer linked to the XRP community, this statement has already been added to Ripple and the individual defendants’ defense.

The turn of events appears to indicate that Ripple now has the upper hand in the lawsuit. The Securities and Exchange Commission, however, seems not willing to recognize that.

A recent letter from the SEC regarding the individual’s filling reminds the Court that the abovementioned public statement is not a statement of the SEC itself or any sort of binding authority on this Court.

The SEC also insisted that all courts that have considered this issue have decided under Howie and concluded that the abundance of case law interpreting and applying Howie at all levels of the judiciary, as well as all related guidance issued by the SEC, provide all the notice that is constitutionally required.

Ripple gains higher ground for XRP, SEC plagued with top-level infighting

In response, the individual defendants Brad Garlinghouse and Chris Larsen, sent a letter stating the SEC’s arguments concerning the two SEC Commissioners’ statements only highlight that the SEC’s position is legally untenable as well as the agency went to “publicly rebuke these two Commissioners’ considered views.

“The SEC’s extraordinary public airing of its internal debate only highlights why the Court must dismiss the SEC’s claims against the Individual Defendants for aiding-and-abetting Ripple’s alleged violation of Section 5 of the Securities Act.”

The two SEC Commissioners have indeed dropped a bombshell on the Ripple lawsuit, and in good timing for the Ripple counsel, who will have ex-SEC Director William Hinman depose on July 27 in order to further strengthen its fair notice defense.

Both parties have recently reached a deal on how to go about Mr. Hinman’s testimony without the SEC objecting to most of Ripple’s inquiry. It remains to be seen what will really happen at the deposition.

The following day, July 28, is the deadline for the requested response from SEC Chair Gary Gensler to Senator Elizabeth Warren. She has requested information about the regulator’s “authority to properly regulate cryptocurrency exchanges and to determine if Congress needs to act to ensure that the SEC has the proper authority to close existing gaps in regulation”.

That letter also sent shock waves of speculation regarding what could be deemed as an orchestrated powerplay to outflank the CFTC.

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