Could the SEC case against Ripple fall due to a conflict of interest?

Could the SEC case against Ripple fall due to a conflict of interest? – Mail Bonus

Newly discovered documents could be a major obstacle for the Securities and Exchange Commission (SEC) in its case against Ripple if they prove that a former Commission official was involved in a conflict of interest.

The SEC has been involved in a legal battle against the blockchain company Ripple (XRP) since 2020, where the cryptocurrency company and senior executives Brad Garlinghouse and Christian Larsen were accused of selling XRP tokens as unlisted securities.

In a statement issued on May 10, the coroner Empower Oversight claimed that documents obtained under the Freedom of Information Request indicated that William Hinman, the former chief financial officer of the SEC, had been involved in a conflict of interest and should not have given a speech in 2018. Ether (ETH) and its trading are not securities.

According to a nonprofit, Hinman should have resigned from Ethereum because of his unspecified “direct financial interests” with Simpson Thacher & Bartlett Law Firm, a member of the Enterprise Ethereum Alliance (EEA).

The EEA promotes the use of blockchain technology on the Ethereum blockchain.

The founder of the legal news agency Crypto Law, lawyer John Deaton, told his 198,000 Twitter followers on May 11 that a possible failure to comply with Hinman could jeopardize the entire SEC case against Ripple. If there is a conflict, Deaton said the issue could be a “game and match” for Ripple.

According to Law360, a legal news outlet, Hinman worked for Simpson Thacher before joining the SEC and then rejoining the company in 2021.

Empower Oversight said Hinman was receiving $ 1.5 million in retirement benefits from the law firm annually while working for the SEC, claiming he “had repeated contact with law firms. The organization stated that “the SEC’s ethics office told him outright not to contact Simpson Thacher’s employees.

The organization called on the SEC’s office to conduct a “comprehensive review of the SEC’s ethics authorities” to determine whether Hinman was in a conflict of interest. That review would include the following:

“(1) Understand the extent to which the conflict involving this former official has heightened the perception that the SEC’s enforcement actions have specifically targeted some cryptocurrencies but given others free access;

(2) Explain to the public how the SEC’s Ethics Office failed to ensure compliance with its clear directives; and (3) Evaluate SEC policies and procedures to identify ways to better monitor compliance with the Code. “

(3) Evaluate SEC policies and procedures to identify ways to better monitor compliance with the Code.

This latest development in the case is an unexpected twist on top of former SEC official Joseph Hall’s prediction in February that the commission will lose to Ripple based on the merits of the case.

Many in the cryptocurrency industry have been following this issue closely because the outcome is likely to have a huge impact. If Ripple wins, it would force the SEC to abandon its aggressive stance on cryptocurrencies. If the commission works, it would almost certainly open the door to a number of new lawsuits against cryptocurrencies.

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XRP has fallen 19.2% over the past 24 hours, trading at $ 0.41, according to CoinGecko.