Ripple (XRP) rallied to $0.439217 Friday from $0.377384 on Thursday in the face of an ongoing Securities and Exchange Commission lawsuit following the comments of William Hinman, former SEC Corporate Finance director.
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Hinman stated that Ether is not securities. (Bitrates.com)
William Hinman: Ether is not Security
SEC requested permission from a judge to reply in the Ripple Lab case. Hinman’s speech, in which he stated that Ethereum was not considered a security, ignited the case.
Evidence was strengthened by emails that were recovered to support claims Hinman may have had a conflict of interest in these comments.
In 2018, Hinman’s speech included this statement:
“Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.”
Hinman’s speech stated that Ethereum is not a security which insofar is tagged as an opinion based on his own understanding of Ether and the Ethereum Network.
He also believes that Ether transactions are vulnerable due to their decentralized nature.
On the other hand, Hinman attested that there are four criteria barring the rationale rendered by SEC, stating that said communications made in 2018 won’t fall under the attorney-client privilege.
The total market value of XRP is $20.60 trillion on the Weekend chart. Source: TradingView.com| Source: TradingView.com
In addition, communications made by Hinman isn’t confidential information. Hinman is the only one who has access to any protected information if it’s discovered by SEC.
Ripple Violated Securities Act of 1933
Ripple’s defense on this case is that XRP’s purpose can’t classify the coin as a security. SEC has no power or authority over Ripple considering that XRP’s function is as a medium of exchange.
Ripple further states that the currency was used to facilitate remittances and is not considered a security.
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Ripple also defended the fact that the SEC didn’t clarify the digital asset classification and failed to give Ripple Labs prompt guidance or warning about how current laws affect XRP.
SEC however disputed that Ripple had in fact received advice in 2012 from them identifying the product it was as an investment, which is subject to SEC regulation.
Hinman’s speech, however, further strengthens Ripple’s defense as it implied that if Ether or XRP was bought to participate in a decentralized platform and not for earning from trading activity, then it’s definitely not a security.
Featured Image from CryptoGlobe. Chart from TradingView.com