Ripple to Question Former SEC Official over Ongoing XRP Lawsuit

Ripple Labs has received the court’s approval to question a former high-level Securities and Exchange Official, William Hinman, as a part of its legal battle with the financial markets regulator. The deposition will focus on the agency’s policy decisions on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

Hinman served the US regulator from 2017 and 2020 as the Director of its Division of Corporation Finance. Then, he oversaw the rise of blank-check firms, confidential filings and other alternatives to traditional initial public offerings and direct listings.

However, he parted from the agency in January this year to join Simpson Thacher & Bartlett LLP as a Senior Advisor and, in May, joined another investment platform as a Partner and a Senior Policy Advisor.

With Hinman’s testimony Ripple wants to understand the process the regulator follows to mandate a policy decision. Hinman also publicly said in a speech in 2018 that Bitcoin and Ether are not securities and Ripple is now trying to establish such grounds over SEC’s allegations of XRP being an unregistered security.

A Dangerous Precedent?

Moreover, the SEC opposed the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term company’s move to question a former high-level official, arguing that such depositions would ‘disrupt the functioning of government agencies by discouraging qualified people from public service given the near certainty that their tenures would ensnare them in litigation’.

However, US Magistrate Judge Sarah Netburn was not convinced with the regulator’s arguments and ruled in favor of Ripple on the deposition.

“This is not a run-of-the-mill SEC enforcement case,” Judge Netburn said, adding that 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.”

Though the SEC successfully went after several high-profile ICOs and cryptocurrencies, its fight against Ripple is believed to be the one with the most impact. According to the agency, the blockchain firm raised $1.3 billion over the years by selling XRP tokens that can be categorized as a security.

But, Ripple is saying that XRP is a medium of exchange for domestic and international transactions and is not a security.