Human rights activists have suspected former SEC officials of biased assessment of cryptocurrencies

August 20, 2021

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Empower Oversight, an advocacy non-profit organization, saw a possible conflict of interest in the actions of former high-ranking SEC officials. The activists sent a request to the agency under the Freedom of Information Act.

Empower Oversight recalled the position of the regulator's former head of corporate finance, William Hinman. In 2018, he stated that Ethereum does not have the properties of securities.

At the same time, the official is alleged by Empower Oversight to have "received millions of dollars from his former employer, the law firm Simpson Thacher". It was affiliated with Enterprise Ethereum Alliance, an organisation that promoted the digital asset.

"The SEC later filed a lawsuit against one of Ethereum's competitors, Ripple, calling its cryptocurrency XRP a security. XRP's value soon plummeted by 25%," the statement said.

According to advocates, Hinman left the Commission in December 2020 to return to Simpson Thacher as a partner.

"The head of the SEC division that sued Ripple, Mark Berger, has similarly moved from the SEC to Simpson Thacher," Empower Oversight said.

Representatives have also become suspicious of former regulator chairman Jay Clayton. In 2018, he said bitcoin was not a security. A year later, the head of the agency expressed a similar view on Ethereum.

After leaving the SEC, he joined the regulatory advisory board of hedge fund One River Asset Management, advocates recalled.

Empower Oversight demanded that Hinman and Berger's correspondence with Simpson Thacher and Enterprise Ethereum Alliance during their service, as well as Clayton's contacts with One River before he left the SEC, be disclosed.

Recall that as part of the case against Ripple, the court rejected the SEC's challenge to Hinman's subpoena to testify.

The fintech company had previously sought access to SEC documents revealing its "interpretation and views" regarding bitcoin and Ethereum.

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