Ripple Plans to Summon Former SEC Director, But the Regulator Objects Motion

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Ripple Plans to Summon Former SEC Director, But the Regulator Objects Motion
Ripple Plans to Summon Former SEC Director, But the Regulator Objects Motion

Ripple Labs and the US Securities and Exchange Commission have argued in court over the testimony of a former US Securities and Exchange Commission official. Although it is speculated that this official could be former chairman Jay Clayton, no one knows exactly who he is,  until now. In the new court documents, regulators revealed that the officer was William Hinman, the former corporate finance director. Hinman has famously stated that Bitcoin and Ethereum are not securities, which has become a major point of contention between Ripple and the SEC case.

Ripple Files a Motion to Summon a Former Director to Testify

Ripple filed a motion for approval from the court a few weeks ago to summon a former director to testify. Since then, the supervisory authorities have rejected this step. As CNF reported Thursday, the US Securities and Exchange Commission is aware that the testimony could have a significant impact on their case.

Now the US Securities and Exchange Commission has filed a motion to withdraw Ripple’s testimony against Hinman.

The motion filed in the Southern District of New York reads:

“In the alternative, the SEC seeks an order quashing Subpoena without prejudice until after Judge Torres Ruling on the SEC’s motion to strike Ripple’s fair notice defense.”

The regulator contested why the judge should withdraw the subpoena in his comprehensive motion. One of the reasons is how former civil servants would prevent qualified candidates from entering the civil service years after they retired.

“Hinman expressed his personal views, not the SEC’s”

For Hinman, it all boils down to saying that Bitcoin and Ethereum are not securities. In June 2018, during the Yahoo All Markets Summit, Hinman listed the top two cryptocurrencies separately as no securities. Many people think that this is the SEC’s position. After all, with the exception of Chairman Clayton and five commissioners, the directors of the US Securities and Exchange Commission are all high-ranking officials. Even the SEC admits that Hinman’s position is very high.

“Between 2017 and 2020, Director Hinman was one of the highest officials in the SEC. Apart from the five commissioners themselves, no SEC official has more important or higher responsibilities than the directors of the six SEC departments.”

SEC Claims Hinman Didn’t Speak on Behalf of the Regulator

However, despite his high position, Hinman did not speak on behalf of the regulator that day. The US Securities and Exchange Commission claimed that, on the contrary, he had expressed a personal opinion.

“Although Director Hinman did not make any public statements about XRP during his tenure as Division Director, he did make a public speech on June 14, 2018, in which he expressed his own view that the offers and sales of the digital asset Ether at that time were “not securities transactions,” based on his understanding of the specific facts and circumstances of Ether and the structure of the Ethereum blockchain at the time.”

The SEC further clarified that Hinman never mentioned or mentioned XRP.

However, former Chairman Clayton, attorney Filan notes, used that speech as an example of how transparent the SEC is to digital assets.

As CNF reported on Thursday, Hinman recently joined Andreessen Horowitz, the largest of all time, as an advisory partner for his crypto fund.