The general counsel for Ripple, Stuart Alderoty, took to Twitter to criticize the Securities and Exchange Commission (SEC) for shifting its stance on the Hinman Documents. He referred to the SEC as a “bouncing regulator.”
A pair of SEC statements are highlighted by Alderoty in the tweet. The first states that the Howey test determined what constituted an investment contract, while the second implies that market players should go to the Hinman records for assistance.
The Hinman papers make reference to the lecture that William Hinman gave in June 2018 at the Yahoo Finance All Markets Summit. In this speech, he said that Ether (ETH) did not qualify as a security.
The assumption that XRP, a cryptocurrency that operates on an open, permissionless, and decentralized blockchain ledger, was either a commodity or a virtual currency was confirmed by the speech given by Hinman on behalf of Ripple. In no way should this be considered a security.
Since December 2020, this matter has been dragged out, and it has been known for a long time that this is causing XRP, the native coin of the blockchain XRP Ledger that was built by Ripple, to be devalued.
Because of this, investor trust in the project has been severely harmed as a result of the SEC’s accusation that the token is a security. This is due to the fact that this allegation implies that all sales of the token, including secondary sales on exchanges, have amounted to unregistered securities offers.
There was a time in early 2018 when XRP had a market cap of over $120 billion, making it the third biggest cryptocurrency. The subsequent decline may be attributed to a combination of factors, including increased attention from U.S. regulators and a general decline in digital currencies.