Why did Ripple fight to obtain confidential SEC emails?

Ripple provided a lively end to an otherwise sleepy week in crypto when its CEO and general counsel took to Twitter to tweak the Securities and Exchange Commission after the company obtained confidential emails the agency had fought to keep secret. The emails concern a 2018 speech in which a former senior official at the SEC declared that Ethereum was not a security on the basis of a novel legal test—a test the agency chose not to apply when it sued Ripple in late 2020.

We still don’t know the content of those emails, but the fact the agency fought hard to conceal them suggests they contain unflattering information related to the SEC’s erratic and arbitrary behavior when it comes to the crypto industry. Ripple’s executives, who have seen the email, used even harsher language to describe the agency, saying “the shamefulness…will shock you” and implying it has been operating in bad faith.

If the executives’ allegations are true, they could have huge implications since the SEC v. Ripple case—in which the agency claims the cryptocurrency XRP is a security—is a bellwether for the industry. While many experts think the SEC has the upper hand based on a 1948 legal test, those considerations could go out the window if it turns out its officials’ recent crypto decisions stem from political or partisan motives. The SEC’s legal position could be shakier still in light of recent Supreme Court jurisprudence that limits the deference courts must show to agencies.

The federal judge overseeing the Ripple case isn’t expected to issue a decision for months, and there’s reason to take the executives’ tweets with a grain of salt—though that hasn’t dampened the enthusiasm of XRP bag holders who have been hyping even the tiniest procedural victory for Ripple in a bid to pump up the price. But given the growing congressional scrutiny of the agency and its power-hungry chairman, any evidence of wrongdoing in the Ripple case email could further undermine the SEC’s authority when it comes to regulating crypto.

The bottom line is that SEC v. Ripple remains a wildcard that could scramble the crypto regulatory landscape and, if the executives’ allegations are true, the chances of that happening just went up.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

A year after its debut, the first Bitcoin futures ETF has performed well technically even if the returns have been lousy during Crypto Winter; investors remain impatient for a spot ETF.

Polkadot creator Gavin Wood is stepping down as CEO of Parity Technologies and instead will stay on as chief architect with a focus on making the cross-chain technology “more relevant” to more people.

The U.K. hacker who stole two of Ed Sheeran‘s unreleased songs and sold them for $148,000 in crypto received an 18-month jail sentence.

FTX‘s CEO said the exchange would spend $6 million to make whole the users who fell victim to a phishing scam, but added that the company would only do so “this once.”

A survey of crypto market participants reflected optimism compared to last summer, with respondents predicting Bitcoin will trade between $17,600 and $25,000 by the end of the year.