Ripple’s legal tussle with the U.S. Securities and Exchange Commission (SEC) took a dramatic turn as District Judge Analisa Torres rejected the SEC’s request to seal documents connected to a controversial 2018 speech by the SEC’s former Corporation Finance Director, William Hinman.
The crypto community has largely welcomed this development, but John Deaton, a vocal Ripple supporter, expressed concerns that the ruling could pose challenges for Ripple.
The Howey Analysis Hangs in the Balance
Deaton pointed out a particular segment of the court’s decision that may prove worrisome for Ripple. This section emphasized Ripple’s XRP sales and payment to third parties for listing XRP, factors directly connected to the Howey analysis – a key component of the litigation. The relevance of this financial data to the Howey test could potentially strengthen the SEC’s case, creating a potential hurdle for Ripple.
The Implications of the Ruling
To further dissect the nuances of Judge Torres’ recent decision, Deaton took to Twitter to announce his intention to join a discussion on a Twitter Space titled, “Hinman Emails DOXXED with John Deaton.” The discussion, scheduled for 12 a.m. UTC, promised to delve into the implications of the court’s remarks.
The SEC had initially sought to seal the documents related to Hinman’s speech on December 22, contending that the documents held no relevance to the court’s summary judgment decision. The Commission argued that its mission’s importance trumped the public’s right to access these documents.
Torres Hits Back
However, Torres countered this argument, categorizing the documents as “judicial documents” that are subject to public access. The Judge asserted that the “Hinman Speech Documents would reasonably have the tendency to influence [the Court’s] ruling on a motion.”
She further dismissed the SEC’s claim that sealing the documents was vital to maintaining “openness and candor” within the SEC. According to her, “the Hinman Speech Documents are not protected by the deliberative process privilege because they do not relate to an agency position, decision, or policy.”