- Ripple’s General Counsel, Stuart Alderoty, reminds SEC officials of their obligation to act impartially under US law.
- The ongoing Ripple lawsuit has revealed hidden facts about the SEC’s litigation tactics and the partiality of former SEC director William Hinman.
Ripple’s General Counsel, Stuart Alderoty, has drawn attention to the obligation of impartiality for officials at the United States Securities and Exchange Commission (SEC) in light of the ongoing Ripple lawsuit. Alderoty emphasizes that federal employees, including those at the SEC, are expected to act impartially under the law.
Alderoty points out that the law poses the question:
“Would a reasonable person, knowing the facts, question the employee’s impartiality?”
This requirement for impartiality is a basic obligation of public service, as outlined in 5 CFR 2635.101(b)(14). This section states that federal employees are entrusted with a public trust that necessitates loyalty to the Constitution, ethical principles, and the law above personal gain.
The Ripple General Counsel highlights that the ongoing Ripple lawsuit has exposed various hidden facts about the SEC. In particular, during the legal battle over obtaining documents from former SEC director William Hinman, Judge Sarah Netburn accused the SEC of hypocrisy in its litigation tactics. The SEC initially argued that Hinman’s speech was irrelevant to the market’s understanding of whether the commission would regulate cryptocurrencies.
However, after losing this argument, the SEC then claimed that the documents were protected by attorney-client privilege, asserting that Hinman sought advice from the commission’s lawyers while drafting the speech.
Judge Netburn observed that the SEC’s positions seemed to be driven by its desired goal rather than a genuine commitment to the law, stating that the commission was
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“adopting its legal position to further its desired goal and not out of a faithful allegiance to the law.”
Furthermore, recently-released documents related to William Hinman’s speech suggest that he displayed partiality while drafting the speech. The speech, delivered in 2018, declared that Ethereum and Bitcoin were not securities. Industry leaders have pointed out that the documents indicate the purpose of the speech was to grant Ethereum a favorable status.
Hinman’s first email regarding the speech was titled “The Ether speech,” and he had met with Ethereum’s co-founder, Vitalik Buterin, a few days prior to delivering the speech.
These controversies have led to speculation that Hinman may have received payment for giving the speech. As a result, Ripple has called for relevant authorities to investigate Hinman and uncover the mysteries surrounding his June 2018 remarks.
The ongoing Ripple lawsuit continues to uncover crucial information that sheds light on the SEC’s actions and raises important questions about the impartiality of its officials.
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