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 as his 2018 speech takes center stage in a renewed debate.
Ripple Labs, in its ongoing legal battle with the SEC, has used Hinman’s speech as important evidence to provide clarity on how the Commission regulates digital assets. In the speech, Hinman stated that digital assets should not be considered a security. The SEC, realizing the impact this document could have on the case, filed a motion to seal it.
Miles Jennings, General Crypto Counsel at a16z, commends Hinman for clarifying how cryptocurrencies can fit into existing securities law. However, Ripple’s CTO David Schwartz believes there were serious inconsistencies in Hinman’s correspondence and views him as corrupt.
Marc Fagel, a former SEC employee, raises concerns about Hinman’s tenure, citing possible ethical problems and suspicions of conflict of interest. However, Fagel commends the attention brought to the XRP community.
Schwartz questions Fagel’s evaluation of Hinman’s role and highlights the inconsistencies in his correspondence. This raises concerns about the influence of individuals on the evolution of securities laws and the alignment of regulations 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. Ripple has been accused of failing to take responsibility for its actions and ignoring legal advice. Ripple’s chief legal officer criticizes the SEC for punishing Ripple and intimidating the industry instead of applying the rules.
The price of XRP is currently $0.58, experiencing a 6% decline in the last seven days. The performance of the asset has been poor, with a negative 7% year-to-date return.