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SEC v. Ripple: SEC May Abandon William If Confirmed That He Had Conflict Of Interest
Attorney John Deaton believes the SEC may likely throw Hinman under the bus if it is proven that he had a conflict of interest during his Ethereum free pass speech in 2018.
Harshvardhan
11:34 12th May, 2022
Policy

New documents released by Empower Oversight concerning the 2018 speech about Ethereum not being security that was made by William Hinman further indict the former Director of SEC’s Corporation Finance of having conflicts of interest while he was still in office.

A recent document released by Empower Oversight suggests that the former SEC’s Corporation of Finance director had a conflict of interest before he made the 2018 speech stating that Ethereum is not a security.

Attorney John Deaton’s Reaction

Commenting on recent developments in Hinman’s 2018 speech, attorney John Deaton, the legal counsel representing 65,000 XRP holders, noted that if the controversial speech was not reviewed for conflict screening by the SEC, the former SEC director could be in a lot of trouble.

By this, attorney Deaton means that if it is proven beyond reasonable doubt that Hinman had conflicts of interest before making the controversial comment about Ethereum, the SEC’s Ethics office may want to give him up to save the agency from being ridiculed.

“@EMPOWR_us and @JsnFostr retrieved the emails below. If Hinman didn’t submit the speech to the conflict screening, it would be a game set & match. The Ethics Office is going to be pissed and wants to throw him under the bus if we force this investigation through letters from Congress,” attorney Deaton added.

Hinman’s 2018 Speech

Recall that Hinman’s 2018 speech has been a significant bone of contention in the lawsuit between Ripple and the Securities and Exchange Commission.

The speech contributed largely to Ethereum overtaking Ripple to become the second-largest cryptocurrency by market capitalization in 2018.

While Hinman concluded that ETH is non-security, Ripple argued that there is a likelihood that the SEC former director mentioned the regulatory status of XRP in the speech since both cryptocurrencies were in a neck-to-neck contest at the time.

However, all efforts to have the documents surrendered have been challenged by the SEC in court, with the securities regulators stating different reasons why the records cannot be used.

Hinman’s Conflicts of Interest While at the SEC

Meanwhile, Hinman has been accused of having conflicts of interest while in office. Despite Hinman’s appointment at the SEC, he still had a series of meetings with his former employer Simpson Thacher.

The law firm is a member of the Enterprise Ethereum Alliance (EEA), which focuses on marketing the Ethereum network as an enterprise solution.

Furthermore, following his appointment as the director of SEC’s Corporation Finance, Hinman still went ahead to appoint his previous colleague from Shearman & Sterling, an organization that is also a member of EEA.

Based on his affiliations with Ethereum, many believed that it would be difficult for Hinman not to have favored the popular blockchain over Ripple while in office.

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