Crypto Controversy: Ripple Demands Probe into Hinman's Ethereum Decision

Crypto Controversy: Ripple Demands Probe into Hinman’s Ethereum Decision

8 August 2023

in Mining

Reading Time: 3 mins read

In 2018, William Hinman’s speech sent ripples through the cryptocurrency community. As the director of the SEC’s Corporation Finance at the time, Hinman notably declared Ethereum and Bitcoin as non-securities, stating their “sufficient decentralization”. But the aftermath of that speech is far from over, with allegations, debates, and calls for investigations dominating headlines.

Inside Hinman’s Address

Hinman’s announcement wasn’t just about the status of Ethereum and Bitcoin. It also hinted at potential controversies to follow. Allegations surfaced, suggesting Hinman might have been financially incentivized to categorize ETH as a non-security, although these remain unverified.

Adding to the intrigue, Empower Oversight disclosed that Hinman was in touch with his former employer, Simpson Thacher & Bartlett, during his SEC directorship. This wouldn’t be out of the ordinary, but Lin, at the time, represented a crypto-mining firm set for an IPO within Hinman’s jurisdiction. And just a week before the speech? Hinman mentioned a meetup with Ethereum’s co-founder, Vitalik Buterin.

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Ripple Strikes Back

Ripple’s chief legal officer, Stuart Alderoty, has not been silent. Backed by supporting documents, Alderoty has been at the forefront, demanding a comprehensive investigation into Hinman’s motivations. He suggests the situation goes beyond Ripple, hinting at possible government official conflicts of interest. His take? It’s time to either debunk the rumours or hold accountable those involved.

The SEC Insider’s Take

It’s not just Ripple pointing fingers. John Reed Stark, former SEC official, has thrown his hat in the ring. Stark highlights numerous allegations against Hinman, from unethical behaviours to potential unlawful actions. His solution is to get the FBI involved, and if the findings are damning, let the Department of Justice handle it. However, Stark also cautioned against getting sidetracked, reminding all that Hinman’s actions should not detract from the real issues concerning securities laws.

Attorney Deaton Chips In

Joining the conversation is Attorney John Deaton. Recalling his early suspicions regarding Hinman’s potential conflicts of interest, Deaton made his point on X.

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

From rallying XRP community members, spurring government watchdog Empower Oversight into action, to prompting Congressman Warren Davidson to question the SEC Enforcement Director, Deaton’s endeavours have been relentless.

Related: Ripple vs SEC: John Deaton Weighs In on Q2 2023 Report

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