Ripple Labs gets approval to question a former high-level Securities Exchange Official as a part of its legal battle with the financial markets’ regulator. The deposition will focus on the agency’s policy decision on cryptocurrencies.
With Hinman’s testimony, Ripple wants to understand the regulator’s process to mandate a policy decision. Hinman also publicly said in a speech in 2018 that Bitcoin and Ether are not securities.
Ripple has said the SEC can’t regulate XRP because, as a virtual currency used in international and domestic transactions, it’s a medium of exchange. It says that XRP is not a security.
The SEC countered the subpoena stating that inquiry “would subject to statement of high-level government official regarding every law, regulation, or policy that they consulted or talked about and subsequently outlined an enforcement action.” “It warned that it 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 argument and ruled in favour of Ripple.
Also Read: SEC Settles Charges Against Operator Of Coinschedule for Touting ICOs
“This is not a run-of-the-mill SEC enforcement matter,” Netburn said, adding that Hinman’s statement “Will not open the floodgates.” Said adding that the case “involves significant policy decision in our markets, the amount in controversy is substantial and public’s interest in the matter is significant.”
Hinman served as the US regulator from 2017 and 2020 as the Director of its Division of Corporation Finance. However, he returned to Simpson Thatcher & Bartlett LLP in January as a Senior advisor.
