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The long-running debate over whether XRP is a security could last until 2023. However, the corporation and crypto supporters are more bullish.

The SEC surprised the technology industry by suing Ripple, launching off what has been the most keenly watched court battle in crypto.

The dispute, which began in December 2020, revolves around the SEC’s claim that Ripple failed to register around $1.4 billion in XRP as securities.

The case has turned into a lengthy struggle, with the future of crypto regulation potentially on the line.

The SEC, which sued Ripple in 2020 for failing to register $1.4 billion worth of XRP as securities, has refused to release emails related to a 2018 speech by former director William Hinman in which he argued the ether cryptocurrency was not a security. The speech sparked a rally in ether’s price and was interpreted as an endorsement of the industry’s view that cryptocurrencies are not securities.

A federal judge ordered the SEC to produce drafts of the speech and related correspondence, which Ripple claims could offer further light on the agency’s cryptocurrency deliberations.

However, the SEC argued in a letter to the judge on Wednesday that the emails were covered by “attorney-client” privilege since Hinman “communicated with the SEC employees to acquire their legal advice.”

“Whether offers and sales of ether constitute securities transactions,” the SEC stated, “is undeniably a legal question.”

Ripple said in a May 13 court statement that Hinman, who left the SEC’s Division of Corporate Finance in late 2020, “was not a ‘client’ of the SEC’s lawyers for purposes of his outside personal activities.” The SEC maintained in its letter that Hinman gave the lecture in his capacity as a senior SEC executive, not in his “personal capacity.”

William Hinman Still a Key Figure in the xrp vs sec case

William Hinman, former SEC Director of the Division of Corporation Finance, has emerged as a key character in the ongoing SEC vs. Ripple litigation.

Hinman stated in a 2018 speech that Bitcoin (BTC) and Ethereum (ETH) are not securities.

The SEC looks determined to shield the speech-related information since a defense request in August 2021 to force the SEC to reveal papers and emails about the speech.

Ripple defense lawyer Matthew Solomon had earlier this month objected to at least the sixth SEC move “filed in response to Defendants’ August 10, 2021, request to compel.”

As previously mentioned by Solomon,

“Since the Defendants filed this motion to compel nearly nine months ago, the Court has twice overruled the SEC’s improper deliberative process privilege objections. Notwithstanding that, and close of fact and expert discovery, the SEC continues to withhold all documents related to a former SEC official’s June 14, 2018 speech.”

Ripple attempting to compel the SEC to fulfill admissions requests.

Ripple filed a Motion to Compel in response to the SEC’s inability to answer to the Defendants’ fourth round of RFAs, according to defense attorney James Filan.

The Ripple Defense concentrated on seven major areas and 53 RFAs with no substantial disagreement, as well as 26 RFAs requesting authentication of record remarks by SEC Commissioners and senior officials.

The areas of focus include

  • Inquiries about XRP, received by the SEC’s Office of Investor Education and FinHub.
  • Watch lists in relation to XRP.
  • SEC trading policies.
  • Ripple’s 2013 meeting with the SEC and other regulators.
  • No-Action Letters.
  • Completeness of the SEC’s document production
  • The authenticity of recorded remarks by SEC personnel.

Final thoughts

Since both parties have responded to the SEC brief, it is now up to the Court to rule.

The outcome of the lawsuit might have far-reaching consequences for cryptocurrency. If the SEC wins, it might change the way crypto firms operate by establishing a precedent that the digital assets they provide customers must be subject to the same onerous reporting and registration requirements as securities.

If Ripple wins, it will be a significant triumph for cryptocurrency at a time when the industry is expanding fast but also under more regulatory scrutiny on numerous fronts.

As the case moves forward, the legal battle is projected to last until 2023. Motions for summary judgment will be filed and heard until December. At that time, the court will either make a decision or send the case to trial.

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