Lawyer accused SEC of misconduct, stating that former official William Hinman favored Ethereum, biasing regulation against Ripple’s XRP.
An XRP lawyer has accused the Securities and Exchange Commission (SEC) of corruption, claiming that the agency favored Ethereum against Ripple’s native token, XRP.
Bill Morgan, a pro-XRP attorney, has reaffirmed allegations of partial regulatory practices, attributing the controversy to the conduct of former SEC official William Hinman.
XRP Lawyer Slams SEC In Ethereum Case
Bill Morgan articulated his discontent on social media platforms regarding an issue he termed “ETH Gate.”
He accused the SEC of being corrupt, emphasizing the manner in which its investigation into Ripple was conducted.
He started his post with a sarcastic tone and said, “But it is all just a grand conspiracy of the XRP community.”
Notably, he emphasized that the investigation into Ripple began when XRP was the third-largest cryptocurrency by market cap, just as Hinman’s speech, which favored Ethereum, was being drafted by SEC staff.
Meanwhile, Morgan’s remarks follow increased scrutiny of the SEC’s tenure of William Hinman.
The New York and California Bar Associations have received formal complaints from the Conservative Political Action Conference (CPAC), which allege that Hinman engaged in unethical conduct and may have had potential conflicts of interest.
CPAC’s complaint highlights the extensive ramifications and possible conflicts of interest associated with Hinman’s prior affiliations that accompanied his 2018 speech, in which he proposed that Ethereum not be categorized as a security.
CPAC’s Involvement And Potential Impact
Andrew Langer, the Director of the Center for Regulatory Freedom at CPAC, has emerged as a prominent advocate for an inquiry into the actions of Hinman.
Langer’s complaints lodged with the bar associations allege that Hinman’s affiliations to his former law firm, Simpson Thacher & Bartlett (STB).
Notably, this law firm’s involvement with the Enterprise Ethereum Alliance prompted substantial ethical concerns.
In light of Hinman’s speech, the firm’s prospective benefits from Ethereum’s regulatory status indicate a conflict of interest that, according to CPAC, requires a comprehensive investigation.
Additionally, Ethereum was effectively exempted from the rigorous regulatory scrutiny typically imposed on securities transactions due to Hinman’s seminal speech in 2018.
This move corresponded with Simpson Thacher’s efforts to promote Ethereum’s use in various business areas.
CPAC’s complaint emphasizes that Hinman’s former firm potentially benefited from the increased market position of Ethereum, a benefit that Hinman’s regulatory guidance may have influenced.
The SEC’s protracted and contentious discovery process in its litigation against Ripple Labs has further exacerbated the controversy surrounding Hinman’s actions.
Furthermore, internal SEC emails exposed Hinman’s pre-speech consultations with Vitalik Buterin, co-founder of Ethereum, notwithstanding his prior determination that Ether would not qualify as a security.
This discovery has sparked claims of bias and corruption within the SEC.
In addition to his subsequent position as an advisory partner for Andreessen Horowitz’s cryptocurrency team, Hinman’s departure from the SEC in 2020 and return to STB have generated controversy.
This appointment, in conjunction with his previous conduct, persistently undermines the credibility and fairness of the SEC’s regulatory procedures throughout his term in office.
