The immunity William Hinman enjoys is one of the reasons he has not been sued for the pain he caused XRP holders.
Following recent details and revelations, the Ripple community continues to enquire why a case has not yet been established against Hinman by the blockchain company’s attorneys.
Commenting on why Ripple’s attorneys have chosen not to sue Hinman, attorney John Deaton, a lawyer representing 65,000 XRP holders, noted that any lawsuit filed against the former SEC finance director will be dismissed with prejudice because he still enjoys immunity as a former government official.
According to attorney Deaton, there is no proof that Hinman knew that Simpson Thacher was a member of the Enterprise Ethereum Alliance (EEA), adding that even if there is one, it would be difficult to confirm from the SEC’s Ethics department whether the former finance director got the necessary approval.
“We don’t have proof, yet. Only a fraction of Hinman’s deposition was disclosed to the public. I GUARANTEE during Hinman’s deposition he was asked whether he knew Simpson Thacher was a member of the EEA. I GUARANTEE he said that he wasn’t aware of it when he gave the speech,” attorney Deaton said.
We don’t have proof, yet. Only a fraction of Hinman’s deposition was disclosed to the public.
I GUARANTEE during Hinman’s deposition he was asked whether he knew Simpson Thacher was a member of the EEA.
I GUARANTEE he said that he wasn’t aware of it when he gave the speech.
— John E Deaton (@JohnEDeaton1) May 6, 2022
Attorney Deaton noted that he is certain that Hinman denied having knowledge that Simpson Thacher was a member of the EEA because if he said anything contrary to that, he would implicate himself.
Per the Twitter thread made by attorney Deaton, the former SEC director is hoping that a case is prematurely established against him so that it would get dismissed by his team of high priced lawyers.
“If the case is dismissed with prejudice, it can prevent any future case from going forward, even if strong evidence of wrongdoing surfaced later. There are doctrines of law called res judicata and collateral estoppel that could be triggered by a dismissal with prejudice,” attorney Deaton said, adding:
If a second case was filed later, with additional evidence, Hinman’s lawyers could invoke these doctrines of law and a judge could rule that the issue was already decided and that he must honor the prior judge’s ruling.
— John E Deaton (@JohnEDeaton1) May 6, 2022
Hinman’s Ethereum’s Free Pass Speech, a Blow to Ripple Investors
For many Ripple investors, William Hinman, the former finance director of the Securities and Exchange Commission (SEC) did more damage to their XRP holdings than the official lawsuit filed against the blockchain company.
Recall that in 2017, Ripple and Ethereum were in a neck-to-neck battle over which cryptocurrency would eventually become the second-largest cryptocurrency.
However, the contest was put to rest after Hinman issued the Ethereum free pass speech, where he declared ETH as a non-security in June 2018.
Moments after the speech, Ethereum’s market capitalization usurped that of Ripple by a large margin before further damage was done to XRP following an SEC lawsuit slammed against the blockchain company for conducting an unregistered security offering.
Hinman’s Alleged Conflict of Interest
Prior to working his appointment at the SEC in 2017, Hinman worked at Simpson Thacher & Bartlett, a law firm that has links with Enterprise Ethereum Alliance (EEA).
The EEA is an organization with numerous members focused on the goal of driving the use of the Ethereum blockchain as an open standard to empower enterprises.
After Hinman resigned from the SEC in 2020, he announced that he was returning to Simpson Thacher, where it was reported that he was still paid all his wages and bonuses by the law firm.
Meanwhile, recent revelations by Empower Oversight revealed that Hinman violated the Securities and Exchange Commission’s rules during his time as finance director.
According to the report, Hinman still had meetings with Simpson Thacher even after he was warned several times by the Ethics department not to do so.
With Simpson Thacher being a member of the EEA, it is not clear to the public what was discussed at the meeting with Hinman before he made the Ethereum free pass speech, which eventually saw ETH overtake XRP as the second-largest cryptocurrency.