After much legal wrangling, Ripple Labs finally released Hinman documents earlier yesterday that showed behind-the-scenes edits and correspondence about a speech the former director of the U.S. Securities and Exchange Commission’s Division of Corporation Finance gave in 2018, in which he said that, while cryptocurrencies such as Bitcoin and Ether may start off as securities, they can become commodities once they become sufficiently decentralized.
While most XRP advocates believed the emails and internal SEC messages would significantly help Ripple in its ongoing legal fight with the agency, Gabriel Shapiro, the general counsel at investment firm Delphi Labs has burst their bubble.
Do The Hinman Emails Really Help Ripple?
Shapiro lambasted the emails as a “nothingburger” that revealed nothing new that would be valuable to Ripple’s case. “I’d love it if this helped Ripple’s case, but it just doesn’t,” opined Shapiro. The legal expert pointed out that the documents, which show that Hinman planned to have a conversation with Ethereum creator Vitalik Buterin in the 2018 pre-speech, do not change anything.
The emails support Hinman’s belief that ether could not be classed as a security. Per Shapiro, the planned conversation with Buterin was widely known among cryptocurrency attorneys for years.
Shapiro admitted that the unsealing of the controversial documents tied to William Hinman is helpful to Ripple’s fair notice defense. Still, he also stressed that the contents of these emails do not provide bombshell arguments for the blockchain company’s case.
In December 2020, the SEC filed a lawsuit accusing Ripple of raising more than $1.3 billion via an unregistered securities offering with its own XRP cryptocurrency. Ripple claims Hinman’s comments at the time indicate XRP should not be considered a security — which could result in a favourable outcome for the blockchain payments company.
Shapiro, however, noted that the extra mark-ups in the Hinman documents offer an interesting perspective of how different SEC personnel were thinking at the time.
Another skeptic is crypto critic-cum-podcaster Bennett Tomlin, who noted:
“Imagine having enough $XRP bags in 2023 that you end up thinking these emails are exciting. You’ve had years to correct your position and still ended up here.”
While the securities lawyer and Bennett shredded any XRPArmy euphoria surrounding the documents, Ripple CEO Brad Garlinghouse believes these emails will play a key role in the SEC’s suit.
In his Twitter thread, Garlinghouse postulated it’s “absolutely unconscionable” that Hinman moved forward with his speech while editors at the agency thought what he was about to say was a bad idea. He said it’s even more disturbing that the SEC sued Ripple and its top executives, “when their own Division Head deliberately created confusion about this.”
After the emails were released to the public, the price of XRP spiked from 53 cents to 56 cents before settling at around 51 cents at publication time, according to data from CoinGecko.