Pro-XRP Attorney Responds to Ethereum Upgrade with Hinman’s Remark

Deaton Reacts to ConsenSys Announcement of Ethereum’s Shanghai Upgrade Launch.

CryptoLaw founder attorney John Deaton has reacted to ConsenSys’ Twitter announcement of Ethereum’s Shanghai/Capella upgrade.

ConsenSys Celebrate Ethereum Shanghai Launch

ConsenSys took to Twitter today to announce the launch of the much-anticipated Shanghai upgrade, allowing users to withdraw their staked ETH for the first time. The private blockchain software company announced an NFT giveaway to celebrate Ethereum’s Shanghai upgrade.

“The moment has finally come! Ethereum has now simultaneously upgraded its execution and consensus layers to enable staked ETH withdrawals. It’s time to celebrate! Claim your Ethereum, Evolved: Shanghai NFT now,” ConsenSys tweeted. 

Meanwhile, ConsenSys is a leading Ethereum software company launched in October 2014 by Canadian-American entrepreneur Joseph Lubin, one of the founders of Ethereum. The firm is a for-profit organization serving as an incubator for blockchain startups that seek to use the Ethereum blockchain.

The firm has been instrumental in some heavyweight Ethereum-related partnerships, including its 2021 collaboration with Mastercard.

Deaton Reacts

Reacting to the development, attorney Deaton referred to an old remark by Bill Hinman, former director of SEC’s Division of Corporation Finance. 

The former SEC executive said in a 2018 CNBC interview that the securities regulator does not see a third-party promoter whenever it takes a look at Ethereum. 

“When we look at Ethereum, we don’t see a third-party promoter.”

“When we look at #Ethereum, we don’t see a third party promoter.”

– Bill Hinman, June 14, 2018 on @CNBC https://t.co/lnZKeKb07F

— John E Deaton (@JohnEDeaton1) April 13, 2023

Apparently, Deaton is indirectly implying that ConsenSys is a third-party promoter for the second-largest cryptocurrency by market capitalization, Ethereum. 

For many XRP community members, the SEC gives some cryptocurrency projects an edge over others. Interestingly, they consider Ethereum as one of the beneficiaries of SEC’s benevolence. 

Hinman’s Speech Sparks Controversies

Recall that Hinman declared Ethereum and Bitcoin as non-securities at Yahoo Finance’s All Market Summit on June 14, 2018. However, Hinman did not comment on XRP, despite the crypto asset ranking among the top three tokens by market valuation as of 2018. 

Hinman’s speech has sparked many controversies, especially after the SEC charged Ripple for allegedly offering unregistered securities. Last year, Empower Oversight, a non-profit watchdog, released documents showing that the former SEC director had a conflict of interest.

Per Empower Oversight, Hinman should not have spoken about Ethereum, given that he has a direct financial interest with Simpson Thacher & Bartlett. This law firm is a member of the Enterprise Ethereum Alliance (EEA), which markets Ethereum as an enterprise solution.

Deaton further made matters worse by disclosing that Hinman received over $9M in profit sharing from Simpson Thacher shortly after he left the SEC. These controversies point to the fact that there was no way Hinman did not make notable regulatory efforts favoring Ethereum.