SEC Can't Seal Docs Tied to Hinman's Ether Speech, Judge in Ripple Suit Rules

The order deals a blow to the SEC in its longstanding procedural fight against Ripple.

AccessTimeIconMay 16, 2023 at 10:25 p.m. UTC
Updated May 17, 2023 at 5:00 p.m. UTC

A federal judge ruled that the U.S. Securities and Exchange Commission cannot seal documents tied to former official William Hinman's 2018 speech on crypto and securities to Ripple in the regulator's ongoing lawsuit against the company closely associated with the XRP cryptocurrency.

District Judge Analisa Torres, of the U.S. District Court for the Southern District of New York, ruled that the documents tied to that speech, in which the former SEC Director of Corporation Finance stated that in his view, ether was not a security, cannot be sealed in a court order. A magistrate judge in the same court, Sarah Netburn, first ruled in January 2022 that those documents needed to be turned over to Ripple as part of the ongoing discovery process.

While Judge Torres will allow the SEC to redact the names and personal information of people mentioned in the documents, she wrote that the SEC cannot seal the so-called "Hinman Speech Documents," saying they were relevant to the judicial process."

"As Judge Netburn found in her order dated January 13, 2022, the Hinman Speech Documents are not protected by the deliberative process privilege because they do not relate to an agency position, decision, or policy," Torres wrote. "Therefore, sealing these documents would not be related to preserving 'openness and candor' within the agency, nor would such an interest be substantial enough to outweigh the strong presumption of public access."

Meanwhile, Ripple tried to redact a number of documents of its own, including contractual agreements, financial information and other types of information. The judge is allowing many of these proposed redactions, including redactions tied to the company's financial statements and certain business information, to go through, saying she agreed with Ripple's assertion that they're targeted and specific.

However, the judge did rule that other proposed redactions are "overbroad," including several proposals tied to XRP."

For instance, Defendants seek to redact references linking Ripple’s revenues with XRP sales," the judge wrote. "Defendants also seek to redact the compensation that Ripple offered to trading platforms to list XRP ... And, Defendants seek to redact the amount of Ripple’s XRP sales targeted at investors through programmatic and institutional sales."

Edited by Danny Nelson.


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Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.