The Hinman emails are a set of internal correspondence between William Hinman, the Director of Corporation Finance at the SEC, and other members within the SEC. Specifically, they are a series of documentation and preparation work for a speech that Hinman gave at the Yahoo Markets Summit in 2018. Ripple believes that the revelations of the 2018 Hinman speech would give Ripple an edge in its lawsuit battle with the SEC. Thus, Ripple has requested and been granted by the court to have the SEC disclose materials pertaining to the speech.

However, the SEC has been wilfully not revealing those documents even after several orders by the courts. Just when it looked like the SEC was never going to comply with the court orders even after the sixth time, to the surprise of many market watchers, they released those documents on 21 October 2022.

The BackGround

In 2018, Hinman made an infamous speech at the Yahoo Markets Summit that BTC and ETH were not securities but commodities. Most of the controversies centred around why Hinman considered ETH not a security but XRP was, when he himself acknowledged that ETH was a security initially, but had morphed from a security to a non-security over time because it became more permissionless and decentralized as time went by, even when ETH had initially raised funds through an ICO.

Throughout the lawsuit, Ripple has been trying to get a statement from Hinman with regards to how he determined ETH to not be a security in the hope of putting XRP in the same light, since XRP also exists on an open, permissionless and decentralized blockchain. However, the SEC had continuously prevented Hinman from coming forth, and even stated that Hinman’s view during his 2018 speech was his personal opinion and not that of the SEC. This stance was absurd because Hinman was giving the speech as a representative of the SEC then and thus, it would be difficult for the commission to walk away from this. It was also the reason why those documents were important - they consolidated the SEC’s thought processes,  views, and biases.

What Did The Emails Reveal?

As the documents have been classified as confidential at the SEC’s insistence, they cannot be revealed to the public. However, the people on the Ripple end have seen it and Stuart Alderoty, the general counsel for Ripple, was so overjoyed that he went to his twitter account and posted a message saying that it was well worth the long fight to get it. We guess it would not take a rocket scientist to figure out if the contents of the documents would help XRP.

Brad Garlinghouse, the co-founder of Ripple, even went as far as to suggest that the SEC had something sinister about them, citing that the shamefulness of the SEC’s behavior will shock people, although he did not elaborate why.

Experts Think a Settlement is Near

With such a major turn of events, many professionals in the legal business think that a settlement could be near as the SEC appears to not want to disclose the contents of the said documents. Most market watchers think this is to protect the integrity of the commission, especially after Garlinghouse has called the SEC’s behavior as shameful.

Quoting Garlinghouse’s tirade over twitter with regards to the SEC, "The SEC’s pursuit of a policy objective isn’t about 'a faithful allegiance to the law' — it’s about power. There is no regard for those companies and people that this approach has harmed. We all should be outraged. The SEC has clearly forgotten that the government works for the people. “

Responding to the tweet from his general counsel, Garlinghouse again slammed the SEC, saying "Don't believe them when they claim to care about disclosure, transparency and clarity. When the truth eventually comes out, the shamefulness of their behavior here will shock you.”

While all these exchanges make one very curious as to what was in those documents, most market watchers do not expect the day to come when those documents would be revealed. Many legal experts are now predicting that the SEC will find a way to settle the lawsuit without having to go to trial since a trial could put the SEC at risk of having to publicly disclose those documents.

Furthermore, Ripple scored another minor victory in that it won the opportunity to depose Hinman, which means that Hinman will need to give a statement on the speech and the documents to Ripple’s legal team soon.

As of now, the market is still fairly lukewarm to the development as the lawsuit has dragged on for more than two years and traders are facing fatigue with the need to follow up on many updates with no final outcome. However, as with how the Hinman emails were disclosed out of the blue, the ending of the lawsuit could come just as suddenly. Hence, traders should not forget to keep XRP on their radars.

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