Ripple CLO, Deaton & Former SEC Official Call for Probe Into Hinman’s Speech

John Reed Stark, Stuart Alderoty, and Attorney Deaton are calling for an investigation into Hinman’s conduct at the SEC, especially the motivation behind his infamous 2018 speech.

The controversy surrounding William Hinman’s infamous speech on cryptocurrencies has continued to be a major topic of discussion. Yesterday, Ripple’s chief legal officer Stuart Alderoty reacted to comments by former SEC official John Reed Stark, calling for an investigation into the Hinman emails.

Hinman Speech Saga

Notably, the emails relate to internal deliberation among SEC officials, leading to the draft of William Hinman’s speech. Recall that Hinman, who was the director of SEC’s Corporation Finance, gave a crypto-related speech on June 14, 2018.

Hinman declared Ethereum and Bitcoin as non-securities during the speech, noting that both assets are “sufficiently decentralized.” However, several allegations suggest that Hinman may have been paid to declare ETH as non-security. These allegations remain unconfirmed.

Notably, Empower Oversight released documents showing that Hinman was still meeting with his former employer, Simpson Thacher & Bartlett, while he was still a director at the SEC.

Furthermore, Hinman said in an email to SEC officials that he would meet with Ethereum co-founder Vitalik Buterin a week before the infamous speech.

Hinman declared ETH a non-security despite top SEC officials not approving the speech.

These events stirred up reactions and allegations that Hinman may have been influenced to give the speech. Meanwhile, XRP community members and top Ripple execs lead the charge, calling for Hinman to be investigated.

Former SEC Official Calls for An Investigation

Interestingly, former SEC official Stark has also joined in calling for a full-scale investigation into Hinman’s controversial speech.

According to a document shared by Alderoty, Stark noted that he had seen several allegations that Hinman acted unethically and unlawfully. He urged the FBI to investigate Hinman to determine whether Hinman was guilty of these claims.

Stark added that if the evidence proves Hinman acted unlawfully, the DOJ must prosecute him.

“But Hinman’s conduct is a weak deflection, a total red herring, and has little to do with the applicability of the securities laws,” he added.

Ripple CLO Reacts

Reacting, Alderoty, who has previously called for an investigation into the motivations leading to Hinman’s speech, said the whole Hinman saga is now broader than Ripple.

He noted that there could be possible conflicts of interest involving a government official, adding that an investigation “will either put it to rest or hold folks accountable.”

Crypto critic/x-SEC official @johnreedstark says there should be an investigation into Bill Hinman. This is broader than Ripple – there could potentially be serious conflicts of interest by a gov official. An investigation will either put it to rest or hold folks accountable. pic.twitter.com/keXdigT5aa

— Stuart Alderoty (@s_alderoty) August 7, 2023

Deaton Recounts His Role in Calling Out Hinman

As expected, Alderoty’s tweet stirred reactions from XRP community members, with Attorney John Deaton joining the discussion.

In a tweet yesterday, Attorney Deaton recounted how he started calling out Hinman’s possible conflicts of interest before he was joined by other XRP community members and sleuths, including Mr. Huber.

For one year I called out the Hinman conflicts and, although I said there was a gross appearance of impropriety (which technically violates 18 USC 208), I never accused him of a crime during that first 18 months.

I wrote about the #Ethereum Free pass and went on… https://t.co/mXIF6JkEo9

— John E Deaton (@JohnEDeaton1) August 7, 2023

These calls inspired government watchdog Empower Oversight to request communication involving Hinman. The organization also sued the SEC for failing to comply with its FOIA request.

Deaton said these combined efforts prompted crypto-friendly congressman Warren Davidson to ask SEC Enforcement Director Gubir S. Grewal whether Hinman’s speech was vetted and approved by the Ethics Office.

However, Grewal refused to answer the question because the matter was being litigated at the time. Furthermore, Deaton said he lost many friends for calling out Hinman, adding that Chris Dixon, founder of a16z Crypto, blocked him.

He also narrated how some top crypto stakeholders called him and other XRP community members conspiracy theorists.

Not bothered by the name-calling, Deaton said he ran videos on Crypto-Law.US asking for Hinman to be investigated. In addition, Empower Oversight sent a referral to the Office of Inspector General (OIG), asking for an investigation.

Per Deaton, he followed it up by sending a letter to every member of the Senate Banking Committee and the Financial Services Committee (FSC) requesting a letter be sent to the OIG regarding Empower Oversight’s referral.

“To my knowledge, no one has. My God, how difficult is it to get an investigation when even senior former SEC leaders are calling for it,” he added.

Deaton asserted that there is a need for people to be held accountable for crypto to move forward. Conclusively, Deaton joined Stark and urged the appropriate authorities to investigate Hinman.