Amid the pending lawsuit, a judge has ordered the SEC to hand over internal emails about Ethereum’s legal status.
Victory for Ripple in the lawsuit
Ripple recorded another procedural victory late this week in its ongoing legal battle with the Securities and Exchange Commission.
On Thursday, a federal district judge dismissed the SEC’s repeated attempts to prevent Ripple from accessing internal SEC emails related to a key speech about Ethereum’s legal status.
A magistrate judge previously granted Ripple access to those emails. This includes a 2018 speech in which former top SEC official William Hinman stated that Ethereum was not a security because it was “sufficiently decentralized”.
For months, the SEC nevertheless tried to withhold the documents from Ripple’s counsel; yesterday’s overruling has forced the SEC to hand them in now.
Effect on the price of XRP
In the hours following the decision, XRP’s price rose just over 15% to USD 0.49. Ripple’s proponents celebrated the ruling as a major victory not only for the company in its lawsuit against the SEC, but also for the crypto industry as a whole in its broader fight against government regulation.
What Ripple hopes to find in these emails is a quote from four years ago where the SEC said Ethereum was not a security. If you apply that reasoning to XRP, it is not security either.
– Said Adam Long, a lawyer specializing in Web3
Experts are skeptical about the relevance of the ruling
However, Long believes that its relevance to Ripple is not necessarily very great.
“This comes down to what Ripple said and what people reasonably believed when they bought XRP,” said Long. “I’d be surprised if this changes things significantly.”
The language of Thursday’s ruling also weakens its potential legal interest.
The federal district judge overseeing the lawsuit ruled yesterday that Ripple had the right to view the SEC’s emails, in part because at the most they would reveal Hinman’s personal opinions. It was not related to “any form of agency position, decision or policy”.
Mike Handelsman, a partner at crypto law firm Kelman PLLC, similarly expressed skepticism about the potential relevance of Hinman’s emails to Ripple’s case.
Hinman’s bias in favor of ETH in this case seems irrelevant to the ultimate issue of whether XRP is a security.
– Said Handelsman
However, this does not mean that he does not agree with the importance of the case.
“It matters that Ripple wins for the industry”, said Handel. “If the SEC is successful in this case, I expect the floodgates to open for enforcement. If the SEC loses this case, it will be quite a blow to them and their “regulation-by-enforcement” plan.
