On June 13, 2023, documents tied to William Hinman, the former director of the U.S. Securities and Exchange Commission (SEC)’s Division of Corporation Finance from 2017 to 2020, were released to the public in connection with the SEC's lawsuit against Ripple, briefly sending the price of the XRP token up 7.4% as optimism spread that Ripple would win their ongoing case.

Here’s why:

Very broadly, Ripple and its partisans have argued that the Hinman emails could reveal a biased or flawed process behind the decision to publicly suggest in a 2018 speech by Hinman that Ethereum (ETH) may not be a security. One smoking gun might have been some sort of display of bias against Ripple and XRP, but the released emails do not mention either directly.

Ripple’s Chief Legal Officer Stuart Alderoty argued after the release that the emails showed Hinman ignoring warnings from colleagues that his speech was not grounded in law and created confusion about securities designations. At the very least, Alderoy seems to be suggesting Ripple has been treated unfairly by regulators.

Early analysis of the emails does not seem to have found a major win for Ripple Labs, however. After a short rally on the morning of the emails’ release, XRP retraced its price and headed even lower, which may reflect some disappointment on this front.

Ahead of the documents’ release, Ripple and XRP supporters had been focused on statements by Hinman suggesting that a token isn’t a security if it is “sufficiently decentralized.” That metric seems to have been used to justify a public carveout for Ethereum, but, at least according to feedback given to Hinman by other SEC staff and officials, was not grounded in existing securities regulation. Ripple has argued that XRP, like Ethereum, is “sufficiently decentralized” and should not be classified as a security according to the standards laid out by Hinman.

Critics have long argued, however, that the underlying claim that Ethereum and XRP are comparably decentralized is itself highly debatable. Most significantly, there has now been close to a decade of debate and litigation over whether Ripple itself should be considered the creator of the XRP ledger and issuer of the XRP token – and therefore the issuer and seller of an unregistered security.

Ripple Labs allies generally characterize the company as separate from XRP. In particular, they have argued that the XRP blockchain was created by Jed McCaleb and Chris Larsen, working as OpenCoin, before an entity called “Ripple” even existed. But OpenCoin became Ripple Labs and what is today simply called Ripple, and those cofounders “gifted” 80 billion XRP, 80% of the total supply, to Ripple Labs. Over the years, Ripple has made a variety of branding and messaging changes to represent that they are not the creators of XRP. That includes changing the preferred way to discuss the token itself, which for many years was commonly referred to as “Ripple.”

Read More: What Is Ripple and the XRP Cryptocurrency?

To critics such as Preston Byrne, this looks like an orchestrated deception, and one of the earliest instances of “decentralization theater.” And if XRP was effectively created or issued by Ripple, the parallel to Ethereum breaks down quickly, since Ethereum has no corporate for-profit parent. This could be a more compelling explanation for the different regulatory treatment of the two chains than bias or procedural failures.

In any case, however the case develops and is ultimately decided, whenever new information is released that supporters believe bolsters or hurts Ripple's side of the case, XRP's price generally moves in parallel with the positive or negative sentiment.

See Also: Ripple Does Not Care Whether XRP Is “Sufficiently Decentralized”