William Hinman stated that he had warned Ripple that XRP was a security at the time when he was in the position of the Director of the SEC.
August 18, 2021, | AtoZ Markets – William Hinman, a former head of corporate finance at the US Securities and Exchange Commission (SEC), claims to have warned Ripple about the possibility of recognizing its XRP token as a security.
During his deposition, the former SEC official said:
“They were interested in ways to change the structure of what they were doing so that it was not a violation of securities laws. The first thing I told them was that if you continue to offer XRP without any restrictions, it will be considered an offering of securities. If you want to be legally compliant, you must stop doing it. They understood me.”
As one of the main arguments in its defense, Ripple cited the fact that it did not receive notifications that would allow it to consider the XRP distribution as a sale of securities. Hinman was invited to testify at the request of Ripple itself, while the SEC petitioned to dismiss him as a witness.
Lawyer Jeremy Hogan presented the alleged dialogue that could take place between Ripple and Hinman during the events he described:
Ripple: If we do something wrong, how do we fix it?
Hinman: It’s impossible. Just stop selling XRP until we are done with filing a claim.
Ripple: This is a highly useless recommendation.
Hinman: I’ll be more helpful when I get back to my private practice. Contact me then.
Hinman’s deposition, which has been partly leaked now, took place on July 27 after the court made an unorthodox decision to authorize it due to huge public interest in the case.
Earlier, the human rights organization Empower Oversight sent a request to the SEC for information disclosure in connection with a possible conflict of interests of the department’s employees in the regulation of cryptocurrencies.
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