June is an important month for crypto. This week was an important week for XRP investors. The so-called Hinman documents were released to the public. It is imperative to understand what’s in there, what they imply and certainly what not. While the Hinman documents are important in the saga that the SEC started, suing Ripple, they are not directly impacting XRP. We do feel though that these documents will eventually play a role, indirectly, to the lawsuit which will impact XRP and most of the crypto community. This week came with some light supporting evidence that our bullish XRP forecast remains in play. For now, we continue to see that XRP has the most beautiful long term crypto chart of 2023.
Hinman documents released
The recently unsealed Hinman documents have sparked interest and speculation within the cryptocurrency community. These documents, which were made publicly available on June 12 as part of the ongoing legal battle between Ripple and the SEC, shed light on several aspects related to XRP and Ether.
While some may have hoped for explosive revelations within the documents, the reality is more nuanced. The documents don’t directly impact the judge’s analysis of whether XRP was offered or sold as an investment contract or its status in the secondary markets. However, they do play a crucial role in Ripple’s fair notice defense, asserting that the SEC failed to provide sufficient notice before suing them for securities fraud.
The emails exchanged among SEC members during the preparation of William Hinman’s 2018 speech, which discussed how the SEC evaluates digital assets as securities, highlight potential conflicts of interest and raise questions about the SEC’s credibility. The speech itself contained disclaimers that it represented the personal views of Hinman and not necessarily those of the Commission. This undermines the SEC’s stance and raises concerns about the regulatory agency’s internal workings.
The documents also reveal an acknowledgment from an attorney within the SEC’s Office of General Counsel that tokens on a sufficiently decentralized network may exist in a regulatory gap. While they may not be considered securities due to the absence of a controlling group, there might still be a need for regulation to protect purchasers.
For Ethereum and some ERC-20 tokens the documents could be seen as positive. If the SEC acknowledged the decentralized nature of the Ethereum network, it strengthens their fair notice argument. It also raises questions about potential inconsistencies in the SEC’s approach to different cryptocurrencies.
Overall, while the Hinman documents may not contain groundbreaking revelations, they play a role in Ripple’s defense strategy and raise important questions about the SEC’s credibility and its handling of cryptocurrencies. As the legal battle between Ripple and the SEC continues, the implications of these documents and their potential impact on the broader cryptocurrency industry will become clear when judge Torres concludes her ruling.
Ripple’s viewpoint
Brad Garlinghouse, CEO of Ripple, who got personally sued by the SEC a few days before Christmas 2020, recorded this video on June 16th, 2023, when the Hinman documents were released.
In the video, Garlinghouse made the point that the Hinman speech (back in 2018) introduced new factors to determine if a token becomes sufficiently decentralized to no longer be considered a security. According to Garlinghouse:
At best these documents showed the senior officials at the SEC could not agree on the Law, and told Bill Hinman directly to confuse the public even more on the rules about crypto. At worst, they show that Hinman deliberately ignored the Law, and trying to create new Laws, something only Congress can do. While he was a public servant, he received millions of dollars of payments from his Law firm which was part of an Alliance with others who had a vested interest in this speech.
Garlinghouse on Twitter:
Some thoughts from me on the events (specifically the release of the Hinman documents) of this week. For me, this has all had a personal bent to it – and felt like it warranted some personal comments. pic.twitter.com/k4dYeQGhsN
— Brad Garlinghouse (@bgarlinghouse) June 16, 2023
A few conclusions and implications from the video, as per Garlinghouse:
- This speech is not about one token or about one blockchain. This speech shows the extent to which the SEC has relentlessly pursued enforcement actions against crypto players while professing fake open arms and calling to “come in and register” while they were lying about their so-called guidance.
- The SEC sued Chris Larson and Brad Garlinghouse, personally, alleging both founders should have known all along that XRP was a security. [Based on the Hinman documents] you can now see that they could not even agree, amongst themselves [what the rules are for crypto to qualify as a security]. “What we saw play out in our case,” says Garlinghouse, “is what is still happening: the SEC is looking to kill crypto innovation in the United States.”
- “An unelected bureaucrat is weaponizing the lack of regulatory clarity to exert jurisdiction over the entire crypto space. This is the definition of putting politics over people. It is the pursuit of power over sound policy.”
- “They knowingly created confusion about the rules, and they used that confusion to regulate over enforcement. That’s bad faith, plain and simple.”
Implications for XRP
The SEC clearly created huge impact on XRP holders. While they pretend to be defending the interest of the investor, they clearly did the opposite. There might have been a very different way to approach the lawsuit without impacting price as much, certainly acknowledging that it was “not a done deal” for the SEC (in which case, individual investors would be victimized).
Still, the long term chart setup of XRP is phenomenal, absolutely phenomenal.
This is what we wrote in this weekend’s analysis to members of our premium crypto investing research service (unedited):
Our site and service attracted a lot of attention with our XRP to 20 USD forecast which we published back in 2018/2019. Frankly, if Ripple is not going to lose (that’s not the same as winning) the SEC case, we continue to believe that XRP will briefly touch 20 USD somewhere in 2026. That’s 40x from current levels.
Keep on accumulating free tokens on any pump, or buy the dip, but don’t over-expose until there is an outcome from the Ripple/SEC case.
The long term XRP chart shows a huge, giant W reversal. This has the potential to push XRP past 3 USD, easily to 10 USD, again, provided Ripple does not lose the case.
We sent more XRP charts and shared more XRP investing tips.
We firmly believe that the XRP chart, provided XRP is not deemed a security, is setting a giant base structure which has the potential to push XRP much higher in the coming years. Pre-requisite: XRP is not deemed a security by judge Torres.