A video in which the former director of the SEC’s Division of Corporation Finance William Hinman states that the sale of Ether did not constitute “securities transactions.” has become a key part of the ongoing legal battle between Ripple Labs and the SEC.
Speaking at the 2018 Fintech Week Conference, Hinman is visible and clearly states that Ether does not constitute “securities transactions”, a comment that could impact the SECs case against Ripple and the SEC’s argument that the XRP token should be deemed a security.
“Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.” Hinman stated in the video
While the veracity of the video seems uncontested, the SEC will neither confirm nor deny that this is Bill Hinman, providing the following comment regarding the matter:
“Subject to all of the foregoing objections, and after reasonable inquiry, the information known and currently available is not sufficient to enable the Commission to admit or deny this request.”
If the SEC were to confirm the comments by the former director of the SEC’s Division of Corporation Finance, this could represent a conflict of interest and potentialy undermine the SEC’s argument that Ripple’s XRP token is a security.
Ripple Labs has consistently maintained that XRP is utilized as an intermediary intended for remittance and not a security. The SEC has contested in the ongoing court case that Ripple has obtained advice from them in 2012 identifying its product as an investment which requires SEC regulation.
Ripple Labs’ legal team noted that the SEC has “failed to respond in accordance with the applicable rules as to 53 RFAs on important subjects where there is no real dispute”.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Samantha has worked as a content specialist over the past several years. She enjoys creating digestible content so that the masses can learn more about this fascinating industry.