On Tuesday (May 16, 2023), Ripple CEO Brad Garlinghouse hailed what he termed a “win for transparency” in the ongoing lawsuit between the U.S. Securities and Exchange Commission (SEC) and his firm. But what does this “win” really mean?
As reported by CoinDesk, a federal judge has ruled that the SEC cannot seal documents connected to a 2018 speech by former official William Hinman on cryptocurrency and securities. This speech is crucial to Ripple’s defense since Hinman stated that, in his view, Ether was not a security. Ripple has been embroiled in a lawsuit with the SEC since December 2020, accused of raising over $1.3 billion through an unregistered, ongoing digital asset (i.e. XRP) securities offering.
The documents in question, referred to as the “Hinman Speech Documents,” are pertinent to the lawsuit. They were initially ordered to be handed over to Ripple by Magistrate Judge Sarah Netburn in January 2022 as part of the discovery process. District Judge Analisa Torres of the U.S. District Court for the Southern District of New York concurred with Netburn’s decision, ruling that the documents cannot be sealed. However, she allowed the SEC to redact the personal information of individuals mentioned in these documents.
Judge Torres argued that the documents are “not protected by the deliberative process privilege because they do not relate to an agency position, decision, or policy.” Consequently, sealing these documents would not preserve “openness and candor” within the agency, nor would such an interest be substantial enough to outweigh the strong presumption of public access.
Meanwhile, according to CoinDesk’s report, Ripple attempted to redact several of its documents, including financial information and contractual agreements. Apparently, Judge Torres allowed many of these proposed redactions, aligning with Ripple’s claim that they are targeted and specific. However, she deemed some of Ripple’s proposed redactions “overbroad,” particularly those related to XRP.