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 topic of discussion following his 2018 speech, which has sparked a renewed debate. 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 has taken a new twist as Ripple used Hinman’s speech as evidence to provide clarity on how the Commission regulates digital assets. Hinman, in his speech at the Yahoo Finance All Markets Summit 2018, stated 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.
Industry key figures are now debating the ethical conduct of Hinman. Jennings commends him for clarifying how crypto fits into existing securities law, while the XRP community believes he is corrupt and should take responsibility for his actions. Marc Fagel, a former SEC employee, highlights the complexities and possible ethical problems associated with Hinman’s tenure, including suspicions of conflict of interest and favoritism towards Ethereum. However, Fagel commends the attention brought to the XRP community.
Ripple’s CTO, David Schwartz, questions Fagel’s evaluation of Hinman’s role and points out inconsistencies in Hinman’s correspondence. This suggests that his influence on the evolution of securities laws should be reconsidered. Schwartz’s position highlights the ongoing situation in the crypto ecosystem where regulations sometimes align with the personal and commercial interests of enforcers.
The legal battle between Ripple and the SEC continues, with the regulator requesting in a court brief that Ripple pay $2 billion in penalties 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 punishing Ripple and intimidating the industry instead of applying the rules. Legal expert Jeremy Hogan warns that the $2 billion fine would force Ripple to sell a lot of XRP, ultimately affecting retail investors.
Currently, the price of XRP is $0.58, with a 6% decline in the last seven days. The asset’s performance has been poor, with a negative 7% year-to-date return.