Newly discovered documents suggest a possible conflict of interest from a former SEC official in its case against Ripple
Several recently released documents may baffle the Securities and Exchange Commission (SEC) lawsuit against Ripple. In particular, if it is proven that the former official of the commission has a conflict of interest, then the course of this lawsuit will be more volatile.
Conflict of interest from a former SEC official could influence the SEC – Ripple lawsuit
The SEC has been embroiled in a legal battle against blockchain company Ripple since 2020. The company and its executives Brad Garlinghouse and Christian Larsen have been accused of selling XRP tokens as unsecured securities.
According to a May 10 announcement, corruption watchdog Empower Oversight stated that documents obtained under a Freedom of Information request show that former Director of Corporate Finance at SEC William Hinman had a conflict of interest. This speech was useful and shouldn’t have been given in 2018. This speech claims Ether (ETH) and its transactions are not securities for those who don’t know.
Empower Oversight sent a letter to the SEC-OIG requesting a comprehensive review of the SEC’s ethics officials to properly manage SEC official William Hinman’s potential conflict of interest regarding cryptocurrency issues.https://t.co/6CqAj2GDxO
— Empower Oversight (@EMPOWR_us) May 10, 2022
According to the nonprofit watchdog, Hinman should not have talked about Ethereum due to his undisclosed “direct financial interests” with Simpson Thacher & Bartlett, a member of the Enterprise Ethereum Alliance (EEA). It is known that the EEA is the promoter of the use of blockchain technology on Ethereum.
Crypto Law founder and attorney John Deaton said Hinman’s potential non-compliance could jeopardize the entire SEC lawsuit against Ripple. According to Deaton, If the conflict exists, Deaton said the case could be “game set and match” for Ripple. According to Law360, Hinman worked at Simpson Thacher before joining the SEC, then rejoining the company in 2021.
Go to https://t.co/TMrNeTTvTd and send the message. The Hinman 🚤 is starting to sink. https://t.co/zs7sXWErXi
— John E Deaton (@JohnEDeaton1) May 11, 2022
Empower Oversight said that Hinman received $1.5 million in annual retirement benefits from the law firm during his time with the SEC. They allege that he had repeated contact with the law firm’s staff and insisted: “The SEC Ethics Office made it clear to him not to contact the Simpson Thacher employee. “.
The organization asked the SEC’s Office of the Inspector General to conduct a comprehensive ethics review of officials at the SEC to determine whether Hinman had a conflict of interest. That assessment includes the following considerations:
Understand that the extent of the conflict involving this former official will exacerbate: Are the SEC enforcement actions targeting a selective target (specifically certain cryptocurrencies) are not.
Explain that the SEC Ethics Office has failed to effectively guarantee compliance with its directives. Review SEC policies and procedures to identify more effective monitoring of ethical compliance guidelines.
This latest development is an unexpected twist from former SEC official Joseph Hall’s February prediction that the commission would lose to Ripple based on the case’s merits.
Many in the crypto industry have been watching this lawsuit as its outcome will have major implications. If Ripple wins, they will force the SEC to back out and take a more positive stance on cryptocurrencies. This will almost certainly open up a new series of lawsuits against these crypto companies if the commission wins.
Read more:
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