The controversy over the securities status of XRP has taken a whole new turn following the release of the Hinman Documents, as ordered by the courts. Since the documents went live, crypto industry experts have been poring over every page, and of the new discoveries made, there is one major conclusion that was imprinted in the fine lines of the text, according to the comments.
This conclusion was that XRP does not satisfy every prong of the Howey Test and, as such, cannot be deemed an investment contract or a security. The United States Securities and Exchange Commission (SEC) fought for the sealing of the highly controversial speech and accompanying documents in part because of the revelation uncovered.
The documents were released after about seven court orders, and the insights show that SEC officials were largely unsure of the classification of the XRP token even when they went ahead and sued Ripple Labs and its top executives.
The document that originated with the SEC shows an emphatic statement that, considering the failure of the Howey Test, "there are reasonable grounds for concluding that XRP should not be considered an “investment contract" or "security" within the meaning of the Securities Act or the Exchange Act, as an excerpt from the documents reads.
— Jay’V (@JayVTheGreat) June 13, 2023
One of the reasons the SEC gave for demanding the sealing off of the Hinman Documents from the public is that the statements made were reflective of Hinman himself and not of the agency. While the insights gleaned showed contradictory stances, the revelations may not necessarily shape the outcome of the lawsuit beyond what has already been decided.
However, the discoveries from the speech will form a massive and lasting public opinion that may hurt the SEC's integrity in its enforcement actions, also raising the stakes in the much-anticipated summary judgment from Judge Analisa Torres.