Attorney and crypto legal expert Jeremy Hogan says that the U.S. Securities and Exchange Commission (SEC) has made a big mistake in its lawsuit with Ripple Labs.
The SEC sued Ripple Labs in December of 2020 for allegedly issuing XRP as an unregistered security, and says it remains one to this day.
In a new video update, Hogan covers how the SEC has filed a motion for the court to reconsider the unsealing of emails relating to former SEC Director of Corporate Finance William Hinman’s speech when he said that Ethereum (ETH) was not a security.
In the SEC’s motion, the regulator says,
“The speech – itself and the many drafts and comments by SEC staff across different SEC divisions and offices deliberating the agency’s approach to the regulation of digital assets – show that Director Hinman and other SEC staff used the speech to provide public guidance as to how [Hinman’s division] would apply the federal securities laws to offers and sales of digital assets including Ether.
Indeed, SEC regulations provide that Director Hinman’s public statements could be relied upon as representing the views of Corp Fin, the division he led.”
By saying that Hinman’s comments about Ethereum could be relied upon as guidance, Hogan says that the SEC is making a blunder by backtracking its previous argument that Hinman’s comments were his personal opinion.
“In litigation, you have to have your strategy, your theory of the case or the theory of the issue that you are arguing, and you have to stick with it. In a DUI (driving under influence) defense case for example, your legal position may be that your guy had been drinking, but was not impaired. If that is your position, you get your client straight on it, and you do not waiver. If he gets up on the stand, and says ‘Well, now that I think about it, I don’t think I drank that night,’ you are screwed.”
With the discovery phase of the lawsuit concluding in less than two weeks, Hogan says the SEC’s last minute decision to tweak its argument could prove to be very risky.
“The entire argument completely backtracks on what the SEC has been saying for almost the last year. What does that mean for a legal strategy standpoint? Look at what the SEC has just done. It’s not good, because it opens up the possibility that the SEC could lose both its pawn, and its bishop… The judge has already made a very strong determination that as far as she’s concerned, the speech was Hinman’s personal opinion… Now, in this motion for reconsideration, it has given her more very similar documents to review and changed its position on the speech 180 degrees.”