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- The SEC will be forced to soften its stance on cryptocurrency. If the commission prevails, it will almost probably pave the way for a slew of additional lawsuits against cryptocurrency companies. According to CoinGecko data, XRP has dropped 19.2 percent in the last 24 hours, trading at $0.41.
- While working at the SEC, Hinman received $1.5 million in retirement benefits from the legal firm, according to Empower Oversight, and he had repeated contact with the law firm’s personnel.
- According to documents obtained through a Freedom of Information request, former SEC Director of Corporate Finance William Hinman had a conflict of interest and should not have made a speech in 2018 in which he stated that Ether (ETH) and its transactions are not securities.
According to newly uncovered documents, a former SEC officer may have had a conflict of interest when he gave a speech about Ethereum, which some believe could compromise the SEC’s case against Ripple. If newly uncovered records show a former SEC officer had a conflict of interest, the Securities and Exchange Commission (SEC) could face a huge barrier in its case against Ripple. Since 2020, the SEC has been involved in a legal battle with blockchain company Ripple (XRP), with senior executives Brad Garlinghouse and Christian Larsen accused of marketing XRP tokens as unregistered securities.
$1.5 Million In Retirement Benefits From The Legal Firm
According to documents obtained through a Freedom of Information request, former SEC Director of Corporate Finance William Hinman had a conflict of interest and should not have made a speech in 2018 in which he stated that Ether (ETH) and its transactions are not securities, according to a May 10 announcement by corruption watchdog Empower Oversight.
Hinman should have recused himself from speaking on Ethereum because he has an undisclosed direct financial interest in the law firm Simpson Thacher & Bartlett, which is a member of the Enterprise Ethereum Alliance, according to the non-profit watchdog (EEA). On the Ethereum blockchain, the EEA supports the adoption of blockchain technology.
On May 11, John Deaton, the founder of legal news site Crypto Law, told his 198,000 Twitter followers that Hinman’s alleged compliance violation might undermine the SEC’s entire case against Ripple. If the dispute arises, Deaton believes Ripple’s case will be game set and match. Hinman worked at Simpson Thacher before joining the SEC, and then returned to the company in 2021, according to Law360.
While working at the SEC, Hinman received $1.5 million in retirement benefits from the legal firm, according to Empower Oversight, and he had repeated contact with the law firm’s personnel. The SEC’s Ethics Office clearly warned him not to have any communication with Simpson Thacher personnel, according to the group. To assess whether Hinman had a conflict of interest, the group asked the SEC’s Office of Inspector General to perform a full investigation of the SEC’s ethics officials.
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XRP Has Dropped 19.2%
Recognize the extent to which the conflict involving this former official exacerbated the notion that the SEC’s enforcement operations targeted some cryptocurrencies selectively while ignoring others. Describe how the SEC’s Ethical Office failed to successfully assure compliance with its unambiguous recommendations; and evaluate the SEC’s rules and procedures to find methods to better monitor compliance with ethics guidance. Review the SEC’s policies and procedures to see how they can better monitor compliance with ethics recommendations.
This latest step in the lawsuit comes after former SEC officer Joseph Hall predicted in February that the commission would lose on the merits of the case to Ripple. Many in the cryptocurrency sector have been closely following this case because the conclusion is expected to have far-reaching consequences. If Ripple prevails, the SEC will be forced to soften its stance on cryptocurrency. If the commission prevails, it will almost probably pave the way for a slew of additional lawsuits against cryptocurrency companies. According to CoinGecko data, XRP has dropped 19.2 percent in the last 24 hours, trading at $0.41.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
