The possibilities arose from newly discovered documents that suggested a possibility of a former SEC official’s conflict of interest
In its case against the Ripple network, the United States Securities and Exchange Commission (SEC) could face a major blockage if it proved a conflict of interest of a former official at the Commission. The SEC has been involved in an ongoing legal battle since 2020 against the blockchain company Ripple where the crypto company and its senior executives, including Brad Garlinghouse and Christian Larsen, were put up on charges of selling Ripple’s native token XRP without registering them as securities.
In an announcement made on Wednesday, empower Oversight, a corruption watchdog claimed that the documents under a request for Freedom Of Information suggested that former SEC corporate finance director William Hinman was having a conflict of interest. In the year 2018, he made a speech that he should have in which he said that Ethereum token Ether (ETH), the transactions made in the token are not at all securities.
As per the nonprofit watchdog agency, Hinman should have stayed back from speaking about ETH due to his direct financial interests undisclosed with the law firm Simpson Thacher and Barlett, which is one of the Enterprise Ethereum Alliance (EEA) members. The EEA is the agency known for the promotion of blockchain tech usage on the Ethereum blockchain.
Founder of Crypto Law lawyer John Deaton told on his Twitter account, having 198,000 followers, that the potential of compliance failure of Hinman could put the entire case of SEC against Ripple network in danger. Deaton went on to say that if the conflict happens to exist, then the case for Ripple could be in a position of total win.
According to a legal news outlet Law360, Hinman worked at the firm Simpson Thacher while joining the Securities and Exchange Commission and then, in 2021, joined the firm again. Empower Oversight said that Hinman received about $1.5 million worth of retirement benefits from the law firm every year while he was working at the SEC, and there are several allegations on him that he was having repeated contacts with the officials of the law firm. The organization also noted that the Ethics Office of the SEC told Hinman not to keep any contact with personnel related to Simpson Thacher.
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