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Ripple Just Won A Major Battle, But Not The War


The S.E.C. is just another 3 letter agency we don’t need.

The agency stood idly by during the massive crypto scams of 2017, continues to let meme-coins go unchecked, and regularly panders to business interests who have a seat at the table.

One such business interest may have been an Ethereum related group, according to reports.

Ripple labs has reportedly won a small victory against The S.E.C; Ripple has won the right to depose a former S.E.C. official who allegedly had ties to a pro Ethereum group.

The former official in question didn’t have a problem in foregoing labeling ETH a security, but XRP is apparently not decentralized enough to escape scrutiny.

The implications of this lawsuit may reach far and wide in the crypto world, and many are hoping Ripple will come out on top of this whole thing.

Here are the latest developments in Ripple vs The S.E.C:

Decrypt had some in depth coverage of the Hinman deposition:

Ripple, meanwhile, wants to know why Hinman cleared Ethereum while his former agency has decided to sue Ripple for selling XRP. There may be sound reasons for Hinman’s conclusion—XRP and ETH are different beasts after all—but Ripple is likely to ask him if he had other motivations. Namely, the company may ask Hinman if his decision on ETH had anything to do with the fact that his former law firm, which was paying him $1.6 million during his tenure at the SEC, is a member of the Enterprise Ethereum Alliance.

Hinman likely came to his conclusion about ETH on independent grounds—not least because his decision feels correct in terms of policy and innovation—but the optics of his ties to the law firm, which smack of conflict-of-interest, are a bad look for both Hinman and the SEC. Little wonder the agency wanted to block Ripple from obtaining Hinman’s testimony.

Bloomberg had more:

U.S. Magistrate Judge Sarah Netburn, after a hearing on Thursday, ordered Hinman to sit for a deposition, saying that as a “high-ranking official” who led one of the six divisions of the SEC, he held “substantial authority in a very important federal agency.”

“This is not a run-of-the-mill SEC enforcement case,” Netburn said, adding that Hinman’s deposition wouldn’t “open the flood gates.” She said the case “involves significant policy decisions in our markets, the amount in controversy is substantial and the public’s interest in this case is significant.”

Hinman was director of the SEC’s Division of Corporation Finance from 2017 to 2020, helping oversee the rise of blank-check firms, confidential filings and other alternatives to traditional initial public offerings and direct listings. He returned to Simpson Thacher & Bartlett LLP as a senior adviser in January and joined investment platform &vest as a partner and senior policy adviser in May.

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