HomeNewsFormer SEC Official Faces Ethics Complaint Over Ethereum Comments

Former SEC Official Faces Ethics Complaint Over Ethereum Comments

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  • Bill Morgan accuses the SEC of favoritism towards Ethereum over XRP, heightening regulatory dispute concerns.
  • CPAC submits formal complaints against William Hinman for potential conflicts of interest during his SEC tenure.

Bill Morgan, an attorney known for his support of XRP, has recently criticized the Securities and Exchange Commission (SEC) for allegedly favoring Ethereum over XRP. This controversy, often referred to as “ETH Gate” involves claims that the SEC’s regulatory actions have been biased.

These claims have now led to formal complaints initiated by the Conservative Political Action Conference (CPAC).

Morgan articulated his concerns, suggesting that the SEC’s investigation into Ripple began under suspicious circumstances. He noted that this investigation started in April 2018 while internal discussions about a speech by former SEC official William Hinman were ongoing. Morgan argues that this overlap points to potential regulatory misconduct.

The focus of the complaints by CPAC centers on William Hinman, who, during his tenure at the SEC, made decisive comments in a 2018 speech indicating that Ethereum should not be classified as a security.

This distinction has significant implications, as it relieves Ethereum of the heavier regulatory scrutiny faced by securities.

CPAC, through its Center for Regulatory Freedom, has taken formal steps by filing complaints against Hinman with the Bar Associations of New York and California. These complaints allege that Hinman’s actions while at the SEC were ethically questionable due to his prior associations with the law firm Simpson Thacher & Bartlett (STB) and his subsequent SEC role where he could influence Ethereum’s regulatory treatment. 

Hinman’s speech in June 2018 coincided with STB’s involvement in the Enterprise Ethereum Alliance, which advocates for Ethereum’s use in business applications.

Andrew Langer, the director of CPAC’s regulatory freedom initiative, has called for an in-depth investigation into Hinman’s professional conduct, citing potential conflicts of interest that may have affected his decisions at the SEC.

The broader implications of these allegations are important, suggesting that Ethereum received a favorable regulatory position that could have been influenced by Hinman’s connections to entities benefiting from Ethereum’s growth. This situation highlights the complexities and potential conflicts of interest within cryptocurrency regulation.

As the SEC continues its legal actions against Ripple, labeling XRP as a security in December 2020, these developments underscore ongoing disparities in how different cryptocurrencies are regulated.

The case against Ripple contrasts starkly with the regulatory path cleared for Ethereum, amplifying calls for a clearer and more equitable regulatory framework in the cryptocurrency sector.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: info@ethnews.com Phone: +49 160 92211628