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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 that 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 emails, 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 growing congressional scrutiny of the agency and its power-hungry chairman, any evidence of wrongdoing in the Ripple case emails could further undermine the SEC’s authority when it comes to regulating crypto.

The bottom line is that SEC v. Ripple remains a wild card 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

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