According to crypto legal expert Jeremy Hogan, the US Securities and Exchange Commission (SEC) may have been bracing for failure in its lawsuit against Ripple Labs.
Earlier this week, Judge Sarah Netburn ordered the SEC to produce documents related to a 2018 speech by former SEC Director William Hinman that challenged the notion that Ripple executives Chris Larsen and Brad Garlinghouse were “objectively reckless.” were when they believed XRP was not a security.
In the speech, Hinman said that Ethereum (ETH) is not a security and therefore not subject to SEC regulations.
In a new video, Hogan reminds his 146,000 YouTube subscribers that the SEC had argued Hinman’s speech was his personal opinion.
Now Hogan says the SEC appears to be changing its position.
“The SEC made a huge mistake in arguing that Hinman’s speech was his personal opinion and then for some unknown reason in this filing changed that position.”
As stated in the court record,
“Based on its review of the documents, the court granted the defendants’ motion to compel the submission…
The SEC’s claim that [Hinman’s] The speech was intended to convey Corporation Finance’s approach to regulating digital asset offerings, which is inconsistent with the SEC’s and Hinman’s previous position that the speech should and did reflect his personal views.”
According to Hogan, changing the SEC’s stance could strengthen Ripple’s fair-notice defense, in which the company argues that the regulator failed to provide “fair notice” that it was breaking the law.
“If the SEC can’t even clarify whether the speech was his personal opinion or perhaps the guidance of the entire department, and they can’t even clarify it in a legal plea with much foresight, how the heck was Ripple supposed to know?”
The SEC first sued Ripple Labs in December 2020, alleging that the payments network sold crypto asset XRP as an unregistered security.
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