đ¨SEC Disclose Findings of Potential Crypto Conflicts of Interest In Ripple XRP Case
Uncertainty lingered about the SECâs intent to pursue its appeal against the Programmatic Sales of XRP ruling in the Ripple case. Speculation grew after the SEC dismissed the Coinbase case (COIN), suggesting a potential withdrawal from the Ripple appeal. However, unlike the Coinbase case, the courtâs rulings added a layer of complexity to the SECâs appeal strategy.
Meanwhile, findings from an Office of Inspector Generalâs (OIG) investigation into potential crypto conflicts of interest within the SEC could tip the scales in Rippleâs favor. Former SEC Chair Gary Gensler withheld the OIGâs findings before stepping down on January 15.
đWhy Does the OIG Investigation Matter?
US government whistle blower Empower Oversight (EO) reported potential crypto conflicts of interest within the SEC to the OIG. Empower Oversight alleges Bill Hinman, former Director of the SECâs Division of Corporation Finance, exhibited bias against Ripple and XRP. In 2018, Hinman famously stated that bitcoin (BTC) and ethereum (ETH) were not securities.
The contentious issue related to Hinmanâs connection with legal firm Simpson Thacher, part of a group promoting Enterprise Ethereum. EO alleges that Hinman received millions of dollars from his former employer, Simpson Thacher, while working on an SEC crypto regulatory framework. Hinman returned to Simpson Thacher after leaving the SEC.
đThe Hinman investigation linked directly to the SEC vs. Ripple case.
Court documents showed that Hinman continued meeting with Simpson Thacher employees despite warnings from the SECâs Ethics Division. The SEC failed on at least six attempts to shield the Hinman speech-related documents under attorney-client privilege
EO and Fox Business Journalist Eleanor Terrett filed Freedom of Information Act (FOIA) requests for the OIGâs report. A non-responsive SEC led to EO suing the agency for failing to release the OIGâs findings.