Documents that have been recently unsealed reveal that the Security and Exchange Commission (SEC) had some reservations about a speech delivered by its former corporate finance director Bill Hinman in 2018. The speech suggested that Ether (ETH), the second-largest cryptocurrency by market capitalization, might not be considered a security under the SEC’s regulations.

The documents show the edits and comments that were made by SEC staff on Hinman’s speech before he gave it at the Yahoo Finance All Markets Summit in June 2018. In his speech, Hinman stated that cryptocurrencies such as Bitcoin (BTC) and Ether could evolve from being securities to being more like commodities if they achieved enough decentralization in their networks.

However, some of the SEC editors were worried that Hinman’s statement could create confusion and inconsistency in the SEC’s position on Ether and other cryptocurrencies. They cautioned that it could be hard for the agency to change its mind on Ether later if it needed to. They also noted that Hinman’s speech implied that his view applied to Ether in general, not just to its initial coin offering (ICO) in 2014.

The documents were unsealed as part of the ongoing legal dispute between Ripple and the SEC. The SEC sued Ripple in December 2020, accusing it of selling its native token XRP as an unregistered security. Ripple has denied this allegation, claiming that XRP is not a security and does not meet the criteria of the Howey test, which is used by the SEC to determine whether an asset is a security or not.

Ripple CEO Brad Garlinghouse said on June 12 that the documents would be very revealing and worth waiting for. He argued that Hinman’s speech showed that the SEC did not have a clear and consistent framework for regulating cryptocurrencies.

The release of the documents coincided with a turbulent time for the crypto industry, as the SEC also filed a motion to freeze the assets of Binance.US, the US-based affiliate of the world’s largest crypto exchange Binance. The motion was part of a series of lawsuits that the SEC has launched against Binance and its executives over alleged violations of securities laws.