Investing.com – The Securities and Exchange Commission (SEC) certainly imagined the litigation with Labs to be easier. If those responsible had known in advance which stone they were setting in motion, some decisions would have turned out differently.
The XRP created by Ripple Labs was launched in 2013. This is more or less just a means to an end, so that the flow of payments around the world can be revolutionized. But with the increasing success and increasing value of the XRP, the project came more and more into the focus of the competition and ultimately the interest of the US regulatory authority was aroused – albeit not entirely unselfishly, as you will see.
SEC vs. Ripple court case is a farce
The Ripple Labs vs. SEC court case has been running since December 2020 and everything that is brought to light in this context leaves one speechless.
The SEC has gone to court for the reason that, in their opinion, the XRP is a security and therefore requires regulation. The problem is that the regulator was unable to provide any solid evidence for this. Rather, it looks like the XRP just doesn’t fit into the worldview of a certain group of people.
The defense of the Ripple attorneys also builds on William H. Hinman (former head of corporate finance at the SEC), speaking in 2018 about that there is no security. However, this statement and the previous career of H. Hinman suggest that the court case against Ripple Labs is based solely on the fact that certain personal incentives play a not insignificant role.
Will H. Hinman personally benefit from a lawsuit against Ripple Labs?
This is where things get really interesting. Before H. Hinman started at the SEC in 2017, he worked at Simpson Thacher & Bartlett LLP, an international law firm with over 1000 lawyers. Here he was responsible for corporate finances. Until then, no problem.
Simpson Thacher & Bartlett LLP is in turn a member of the Enterprise Ethereum Alliance. An organization that has set itself the task of making the Ethereum blockchain a global industry standard. And at this point, the SEC lawsuit initiated by H. Hinman against Ripple Labs gets its first bland aftertaste.
Somebody is switching from a law firm committed to the success of Ethereum to a regulator. And here the same person issues a free ticket to the Ethereum network in order to then target the competition, in this case Ripple.
If that’s not yet suspect, you should let the following melt on your tongue.
Hinman was by no means just an employee of Simpson Thacher & Bartlett LLP, he is a partner in the law firm. During his tenure with the SEC, he has generated $ 15 million in revenue from this existing partnership.
And three times you can guess where H. Hinmann is now working again after doing what he apparently took over for the SEC?
That was also the reason why the SEC attorneys tried unsuccessfully by all means to prevent H. Hinman from appearing in court and having to testify whether he decided in 2018 that Ethereum is not a security.
Also very questionable is the fact why the SEC targeted the ICOs based on the Ethereum blockchain, but the original ICO, on which Ethereum itself was based, played no role at all.
After what we now know, it is no longer really questionable, but just another indication that Ethereum was deliberately promoted while sticks are thrown between the legs of the competition.
Have SEC employees speculated with XRP themselves?
Ripple Labs lawyers are currently requesting access to documents showing that SEC employees have bought and sold XRP themselves. Should the XRP really be officially considered a security, they would have been prohibited from doing so. The lawyers suspect, however, that there are documents that have allowed the employees to trade in XRP and Ethereum.
The documents so far show that the SEC did not rule until January 19, 2018 that employees should pay attention to whether they were investing in the crypto sector whether they were dealing with potential securities. There was talk of individual decisions. We remember that this very year H. Hinman said that Ethereum is not a security.
In any case, the court ruled that the SEC must hand over the requested documents. The deadline for this is September 3rd.
Overall, I can say that it doesn’t look bad for Ripple Labs. However, being right and being right are two different things.
From Marco Oehrl