Hinman docs unsealed: SEC concerned over ‘Ether is not a security’ statement

Documents recently released demonstrate that revisions were made to a speech given in 2018 by Bill Hinman, the ex-director of the Security and Exchange Commission’s corporate finance division, which indicate that the editors were worried his words might weaken the concept that Ether (ETH) is a security.

The SEC comments caution that this could potentially trap the agency into a stance that would be difficult to alter in the future.

“Despite the caveats in the sentence, it appears that it would be hard for the agency to alter their stance on Ether in the future,” the revisions to the documents stated. “Moreover, the rest of the paragraph heavily implies that the opinion applies to Ether.”

The documents known as the Hinman papers are related to internal SEC communications in reference to a speech given by Hinman in 2018. He remarked that cryptocurrencies like Bitcoin (BTC) and Ether may be considered securities initially, but may evolve into something more like a commodity when they become sufficiently decentralized.

Ripple CEO Brad Garlinghouse declared on June 12 that the documents in question would be “well worth the wait.”

Pro-XRP attorney suggests that Ripple will secure an outright victory from the SEC with a probability of less than 3%.

The release of the documents occurs during a very chaotic period for the cryptocurrency sector. On June 13, the federal court will also be listening to the SEC’s petition to freeze the assets of Binance.US, after a series of legal proceedings against the exchange.

In December 2020, the SEC initially initiated legal action against Ripple, claiming that the sale of its XRP (XRP) token constituted an unregistered securities offering. Since then, Ripple has rejected the idea that XRP is a security, contending that it does not meet the criteria of the Howey test.

Magazine: The Competition to Construct Secure and Legitimate Coin Mixers – Tornado Cash 2.0.

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