Newly released documents show redactions of a 2018 speech by Bill Hinman, the former director of the SEC's division of corporate finance, suggesting editors fear his statements could undermine the idea of Ether is a kind of security.
The SEC's commentary warned that this could put the agency in a position that would be difficult to change later. “Even with the caveats in the sentence, it seems difficult for the agency to take a different stance on Ether in the future,” the document's editors wrote. "Furthermore, the rest of the paragraph strongly suggests that this idea applies to ether."
The Hinman filing references internal SEC information about a speech Hinman gave in 2018 in which he said that while cryptocurrencies such as Bitcoin, Ethers may have started as securities, and once they become sufficiently decentralized, they have the potential to become more commodity-like.
The documents will prove to be "well worth the wait," Ripple CEO Brad Garlinghouse said on June 12. The unsealing of the documents comes at an extremely turbulent time for the crypto industry. On June 13, the federal court also heard the SEC's motion to freeze the assets of Binance. US following a series of legal actions against the exchange.
The SEC first took legal action against Ripple in December 2020, accusing it of selling its native XRP, Tokens represent unregistered securities offerings. Since then, Ripple has denied that XRP is a security, arguing that it fails the Howey test.
