A nonprofit watchdog group Empower Oversight identified a potential conflict of interest in the actions of former senior officials of the SEC. Activists sent a request to the agency under the Freedom of Information Act.
The Empower Oversight group recalled the former head of the regulator’s Corporate Finance Department, William Hinman. In 2018 hestated that Ethereum lacks the properties associated with a security.
At the same time, the official, as Empower Oversight claims, "was paid millions of dollars by his former employer, the law firm Simpson Thacher." It was affiliated with the Enterprise Ethereum Alliance, which promoted the digital asset.
"Later the SEC filed a lawsuit against one of Ethereum’s competitors, Ripple, naming its cryptocurrency XRP a security. The price of XRP subsequently fell by 25%", the statement says.
According to the advocates, Hinman left the Commission in December 2020 to return to Simpson Thacher as a partner.
"The head of the SEC unit that filed the Ripple lawsuit, Mark Berger, similarly moved from the SEC to Simpson Thacher," Empower Oversight said.
The group also questioned the former chairman of the regulator, Jay Clayton. In 2018 he said that Bitcoin is not a security. A year later the agency head voiced a similar view on Ethereum.
After leaving the SEC, he joined the advisory board on regulatory affairs for the hedge fund One River Asset Management, the rights advocates noted.
Empower Oversight called for the disclosure of Hinman and Berger’s correspondence with Simpson Thacher and the Enterprise Ethereum Alliance during their tenure, as well as Clayton’s contacts with One River before his departure from the SEC.
Earlier, in the Ripple case the court rejected the SEC’s bid to compel Hinman to testify.
Earlier, a fintech company gained access to SEC documents revealing its "interpretation and views" on Bitcoin and Ethereum.
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