The independent corruption watchdog mounts pressure on the SEC to investigate Hinman’s conflict of interest during his time at the agency.
Empower Oversight, a leading non-profit corruption watchdog, is calling for an investigation into the ethics failure of a former employee of the Securities and Exchange Commission’s Ethics office that allegedly caused severe losses to many.
William Hinman, the former director of SEC’s Corporate Finance, has been accused of having a conflict of interest while he worked at the commission.
According to documents published by Empower Oversight, Hinman was alleged to have a financial interest in a law firm Simpson Thatcher, a partner at Enterprise Ethereum Alliance (EEA), during his time at the SEC.
EEA is a company created to market Ethereum as an enterprise solution.
Hinman’s Controversial 2018 Speech
Empower Oversight noted that Hinman flouted the SEC’s Ethics office instruction by failing to name Simpson Thatcher as a member of EEA during his 2018 controversial speech, where he declared Ethereum as a non-security.
“Based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions,” Hinman was quoted as saying in a statement issued in 2018.
It is worth noting that Hinman was instrumental in the ongoing lawsuit between Ripple and the Securities and Exchange Commission.
Hinman Played Major Role in Ripple Lawsuit
Prior to Hinman’s speech, Ripple was in close competition with Ethereum over which cryptocurrency would become the second-largest digital currency after Bitcoin.
Moments after Hinman’s speech, many investors believed that the SEC does not consider Ethereum as a security, thus prompting the widespread adoption of ETH, while XRP’s adoption plummeted.
The development hinted that it was only a matter of time before the SEC would charge Ripple.
In December 2020, XRP investors’ fear came to pass as the SEC officially charged Ripple for allegedly offering an unregistered securities offering in the United States.
Several XRP holders have slammed Hinman’s controversial speech, with many calling on the agency to probe the former SEC exec.
Interestingly, Empower Oversight has joined the many aggrieved XRP investors to request that the SEC’s office of the inspector general investigate Hinman’s alleged ethics violations during his tenure at the agency.
Meanwhile, the development was retweeted by attorney John Deaton, the lawyer representing 72,500 XRP holders in a class action suit against the SEC.
"Empower Oversight…is calling for an investigation into ethics failures at the SEC after records emerged alleging one of its former employees, William Hinman, had a direct financial interest in a law firm…while working at the SEC."https://t.co/5cETZhJOoZ
— Empower Oversight (@EMPOWR_us) August 25, 2022