US SEC Releases Report on Bill Hinmans Investigation Over Selective Enforcement Involving Ethereum and XRP

The US SECs Office of Inspector General (IOG) has released an investigation report over allegations against former high-ranking employee Bill Hinman.Whistle-blowing firm Empower Oversight (EMPOWER) confirmed the receipt of the ten-page document after years of asking. The report highlighted the findings on the watchdog groups accusations against Bill Hinman, the former US SECs Corporation Finance Director.For context, EMPOWER accused Hinman of using his position to promote his personal interest and that of his former employer, a breach of the US SECs ethics and conduct. However, the IOGs report noted that the allegations did not hold water.Case EtymologyHinman joined the US SEC in May 2017 after a 16-year stint at the prominent US white-shoe law firm Simpson Thacher & Bartlett (STB). Notably, STB was part of the Enterprise Ethereum Alliance, a coalition of firms focused on promoting the smart contract network.Controversy erupted after Hinmans famous 2018 speech in an interview with Yahoo Mail, in which he stated that Ethereum is not a security. EMPOWER found the statements contradicted the US Securities and Exchange Commission's (SEC) stance in subsequent enforcements against firms like Ripple in an August 2021 Freedom of Information Act (FOIA) request.The whistleblowers highlighted a possible conflict of interest in the speech, accusing Hinman of conniving with his former employees to promote the Ethereum network. Furthermore, it alleged that the statement yielded personal gains for the SEC director and sought access to communication records between Hinman and the STB.EMPOWER Reacts as US SEC Acquits HinmanYears after the legal process commenced, the SEC finally released details of its investigation on April 10. The report, dated December 9, 2024, found EMPOWERs allegations untrue. For context, the report noted that Hinman did not violate any criminal conflict of interest law.

Excerpt from 10-page IOG Report

Furthermore, it stressed that the directors Ethereum speech did not directly impact his financial status in any way, as he had no cryptocurrency per his 2021 asset attestation. Moreover, he adjusted his retirement annuity with STB to a fixed rate during his onboarding with the SEC, complying with ethics rules.Additionally, SEC stated that he prepared for this speech at Yahoo Mail in compliance with the SEC ethics rules. This meant he did not draft the speech alone but with a team of officers; hence, they were not his personal thoughts.However, EMPOWER has criticized the report, alleging it had a limited scope. The whistleblowers founder, Jason Foster, insisted that the IOG failed to clarify if Hinman had committed a crime with his contact with his former firm despite assuming a sensitive role in the US SEC.https://twitter.com/JsnFostr/status/1910723709188349959Interestingly, Foster noted that the commission also failed to address the issue of selective enforcement, a decadence several industry proponents have accused the SEC officials of involvement in. Particularly, he mentioned Ethereums classification as a non-security and XRPs converse disposition.Notably, XRP enthusiasts stressed this point in a heated argument with Cardano founder Charles Hoskinson. They emphasized selective litigation, accusing the former Ethereum co-founder and his team of playing a role in the SECs lawsuit against Ripple in 2020.

Text source: The Crypto Basic

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