Former SEC Chief William Hinman Has Relationship With Enterprise Ethereum Alliance

Ripple Crypto on the rise (photo: doc. Pixabay)

JAKARTA – In the midst of the dispute between the US Securities and Exchange Commission (SEC) and Ripple (XRP), the non-profit organization Empower Oversight recently presented evidence regarding the conflict of interest of SEC officials in suing Ripple.

The Daily Hodl reports that Empower Oversight said it had received more than 200 email records via Freedom of Information Act requests describing conflicts of interest within the SEC, specifically regarding William Hinman, former Director of the SEC's Division of Corporate Finance.

According to the organization's explanation of the email, SEC officials had warned Hinman of a conflict of interest because of his relationship with Simpson Thacher. For information, Simpson Thacher is a law firm that promotes Ethereum (ETH) through an organization called the Enterprise Ethereum Alliance.

"The SEC's Office of Ethics warns former SEC official William Hinman that he has a direct financial interest in Simpson Thacher, and as such, he must resign from anything that will affect the company," Empower Oversight said of the email related to Hinman.

“In addition, the Ethics office explicitly told Hinman, as per documents, not to have contact with Simpson Thacher for any reason. However, Hinman met with Josh Bonnie, partner at Simpson Thacher, at least three times after the anniversary," the note added.

It didn't stop there, the non-profit organization also explained that Hinman met with co-founders and investors in Ethereum ahead of his 2018 speech that changed XRP's position. In his speech, Hinman stated that Ether was not included in securities.

Empower Oversight assesses that Simpson Thacher has a role in the Enterprise Ethereum Alliance and that it is aimed at promoting the commercial use of Ethereum.

"This raises the question of whether Hinman fully disclosed Simpson Thacher's role on Ethereum from SEC Ethics officials and whether they would approve his meeting or speech if he agreed to it," the nonprofit concluded.

Empower Oversight revealed evidence of one of the emails which read:

“But Bill [Hinman], we recognize that you have a full-fledged financial conflict with your old company, not just impartiality. Therefore, you should not hold meetings with your old company. Even group meetings.”

As a result, Empower Oversight filed a lawsuit against the SEC in December 2021. The company alleges a conflict of interest stems from Hinman's involvement with Simpson Thacher and the Enterprise Ethereum Alliance.

The lawsuit also says that Marc Berger, chairman of the SEC's Division of Enforcement and the lead author of the lawsuit against Ripple Labs, also left the SEC for Simpson Thacher.