As Ripple and the SEC are headed for a final showdown, one expert feels that the odds are stacked against the blockchain firm.
The closely watched SEC lawsuit against Ripple is one of the industry’s most important tests as would provide the first conclusive decision on whether a crypto asset is or is not a security.
While many crypto advocates think that the case is giving US Securities and Exchange Commission its toughest fight against crypto regulation.
Gene Hoffman of blockchain company Chia Network believes that Ripple will lose the battle with the regulator.
“The only outcome is that a federal judge will rule that Ripple’s sales of XRP made XRP a security,” he tweeted.
Hoffman also claimed that federal judges are wary enough to realize that most XRP buyers purchased the cryptocurrency with the hope that “the number will increase.” Therefore, it is unlikely that Ripple and its supporters’ arguments regarding the purported utility of cryptocurrency would succeed.
In late 2020, the SEC filed a lawsuit against Ripple, alleging that the payments company offered the cryptocurrency asset XRP as an unregistered security.
In a recent court decision, the blockchain firm won the right to demand the SEC turn over papers that it planned to use as evidence. These documents included a speech by William Hinman, the company’s former director of corporate finance, as well as related draughts and internal emails.
According to Hinman’s 2018 lecture, Ethereum [ETH] is not a security.
Recently a legal expert also gave his take on how the legal battle between SEC and Ripple Labs will pan out.
Ripple: Hinman Documents won’t Be Revealed- Legal Expert
According to an attorney James K. Filan, US District Judge Analisa Torres would decide whether records in the case should be made public only after rendering a summary decision.
Any references to the Hinman documents in subsequent court filings, per Filan, will probably be censored because they are still under seal.
“There are three big issues outstanding: 1) summary judgment motions, 2) expert challenges (‘Daubert motions’), and 3) sealing issues regarding the expert reports, the Hinman documents, and other material relied on by the SEC and Ripple in their motions.”
The lawyer further said since the Hinman documents remain sealed, any references to them in upcoming court filings will likely be redacted.