Ripple achieved another legal victory in its ongoing battle with the Securities and Exchange Commission (SEC) this week. In 2020, the SEC sued Ripple, accusing the crypto payments firm of engaging in the unregistered sale of $1.3 billion worth of XRP, a cryptocurrency originally created by Ripple’s founders.
Late last week, a federal district judge overruled the SEC’s repeated attempts to block Ripple from accessing internal SEC emails related to a crucial speech about the regulatory status of Ethereum, a competing cryptocurrency. Ripple believes that these emails will support its case and reveal the SEC’s preferential treatment of Bitcoin and Ethereum while disregarding other cryptocurrencies.
Despite the ruling, legal experts interviewed by Decrypt expressed skepticism about its significance and its potential to improve Ripple’s chances of winning the lawsuit against the SEC.
Previously, a magistrate judge had granted Ripple access to the aforementioned emails, which provide context for a 2018 speech by former top SEC official William Hinman. In the speech, Hinman stated that Ethereum was not considered a security due to its “sufficient decentralization.” Despite this, the SEC attempted to withhold the documents from Ripple’s counsel. However, the recent overruling now compels the agency to produce the emails.
Following the court’s decision, the price of XRP experienced a 15% surge, reaching $0.49. Ripple’s supporters hailed this ruling as a significant victory, not only for the company’s legal battle with the SEC but also for the broader crypto industry’s resistance against government regulation.
Decrypt interviewed Adam David Long, a Web3 attorney, who highlighted Ripple’s hope of uncovering a compelling quote in the emails. The company aims to use this quote to argue that if the SEC considered Ethereum decentralized and not a security four years ago, then the same reasoning should apply to XRP.
However, Long believes that even if such evidence exists, its relevance to Ripple’s case remains questionable.
“The outcome of this case will ultimately depend on what Ripple communicated and what buyers of XRP reasonably believed at the time of purchase,” Long stated. “I will be surprised if internal SEC debates about a speech significantly impact the case.”
Ironically, the language used in Thursday’s ruling granting Ripple access to the internal SEC emails undermines their potential legal importance.
