By George Ward
John Deaton, a lawyer and founder of CryptoLaw.US and a keen follower of the Ripple-SEC case, has taken to his Twitter handle to criticize the financial regulator. The lawyer was not pleased with the behaviors of the SEC in the context of its lawsuit against Ripple Labs.
Unable To Prove Allegations
On his Twitter post, Deaton quoted the federal magistrate judge, Sarah Netburn, on her criticism of the US Securities and Exchange Commission (SEC) legal team. Judge Netburn is reported to have rebuked the regulator over its inability to prove its allegations that Ripple Labs has been selling unregistered securities.
As revealed by Deaton, Judge Netburn slammed the perceived “hypocrisy” on the part of the regulator for presenting arguments to the court involving the famous Hinman speech. The judge stressed that the SEC’s lawyers are more interested in wielding its control over the crypto industry than in obtaining justice for the case.
The legal practitioner emphasized that the judge reached this conclusion because the regulator has previously argued about the irrelevance of the Hinman speech in the context of the SEC regulation of the crypto market. On the other hand, the judge disclosed that the SEC failed to consider Hinman’s consultation with its lawyers before making his speech about crypto assets.
As a result, the two parties await the verdict of the presiding judge after both have submitted their detailed documentation of the case along with the amicus preparations to Netburn.
Why The Hinman Speech Is Important
In 2018, Willaim Hinman, then the head of SEC’s Division of Corporate Finance, delivered a speech on the classification of digital assets, outlining why the regulator believes Bitcoin (BTC) and Ethereum (ETH) are not securities. It is worth noting that BTC and ETH are the two leading virtual currencies in the crypto market.
Interestingly, the two assets were classified as commodities by both the SEC and its sister agency, the Commodity Futures Trading Commission (CFTC). Since the beginning of the court battle, Ripple’s lawyers have tried to persuade the judge to force the SEC to produce documents containing the Hinman speech in court.
Ultimately, Ripple scored an important win last year when the judge asked the commission to make available a document containing the Hinman speech for the court review. Over the past week, a media personality, Roslyn Layton, reportedly filed a motion to the judge requesting access to the Hinman document.
Last December, the SEC decided to seal Hinman’s speech in its case against Ripple Labs, which sparked outrage among crypto community members. The SEC’s request to redact part of the information in its internal document was an attempt to dismiss Ripple’s choice of the Hinman speech as a piece of critical evidence.
Ripple uses the Hinman speech in its case with the regulator as evidence to clarify how the SEC should approach cryptocurrency regulation. This case has been ongoing for more than two years, with the crypto community rooting for a win against the regulator.