The ethical conduct of former Director of the Division of Corporation Finance in the U.S. Securities and Exchange Commission (SEC), William Hinman, has become a subject of debate following his 2018 speech. While Miles Jennings, General Crypto Counsel at a16z, commends Hinman for his clarifications, Ripple’s CTO David Schwartz believes there were serious inconsistencies in his correspondence.
The legal battle between Ripple Labs and the SEC took a new turn when Ripple used Hinman’s speech as evidence to shed light on how the Commission regulates digital assets. Hinman had emphatically stated at the Yahoo Finance All Markets Summit 2018 that digital assets should not be considered securities. The SEC filed a motion to seal the speech document after realizing its potential impact on the case.
Hinman’s statement is now a topic of discussion among industry figures, with differing opinions on his ethical conduct. Miles Jennings commends Hinman for clarifying how crypto fits into existing securities law, while the XRP community views him as corrupt and calls for him to take responsibility for his actions.
Former SEC employee Marc Fagel highlights the complexities and possible ethical problems associated with Hinman’s tenure, as well as suspicions of conflict of interest and bias towards Ethereum. However, Fagel also commends the attention brought to the XRP community.
Ripple’s CTO, David Schwartz, questions Fagel’s evaluation of Hinman’s role, pointing out inconsistencies in Hinman’s correspondence. This raises the need to reconsider Hinman’s influence on the evolution of securities laws and highlights the ongoing situation where regulations align with personal and commercial interests.
The legal battle between Ripple and the SEC continues, with the regulator requesting a $2 billion penalty for selling unregistered securities. The SEC accuses Ripple of failing to take responsibility for its actions and ignoring legal advice regarding the promotion of XRP as an investment.
Ripple’s chief legal officer, Stuart Alderoty, criticizes the SEC for pursuing punishment against Ripple and the industry instead of applying fair rules. Legal expert Jeremy Hogan condemns the $2 billion fine, warning that it would force Ripple to sell a significant amount of XRP, negatively impacting retail investors.
Currently, the price of XRP stands at $0.58, experiencing a 6% decline in the last seven days. The asset’s performance has been poor, with a negative 7% year-to-date return.