Oversight Sues SEC Over Conflict of Interest

Oversight

Empower Oversight Whistleblowers & Research (EMPOWR), “a nonprofit, nonpartisan educational organization dedicated to enhancing independent oversight of government and corporate wrongdoing.” has launched a lawsuit against the Securities and Exchange Commission (SEC) in order to compel them to comply with multiple Freedom of Information Act (FOIA) requests on potential conflicts of interest from former high-ranking officials specifically in regard to regulation of cryptocurrencies.

A Press Release from EMPOWR described the seriously suspect relationships and actions involved.

“In August, Empower Oversight submitted a detailed FOIA request to the SEC seeking any communications related to senior SEC officials and their current and former employers regarding cryptocurrencies. Former senior SEC official William Hinman received millions of dollars in compensation from his former employer, Simpson Thacher, while helping guide the SEC’s regulation of cryptocurrencies. Simpson Thacher is part of a group that promotes Enterprise Ethereum, a cryptocurrency. Hinman said that Ethereum wasn’t a security, which in turn caused a spike in its value.”

Empower Oversight posted several Tweets regarding the SEC’s failure to respond to the extremely damning FOIA requests regarding the inconsistent handling of several cryptocurrencies as securities whereas Ethereum the one crypto with a financial interest for a high-ranking official in Hinman was not. An arrangement that was certainly to his benefit.

Reports of  A ‘Bit’ of A Double Standard On Crytpo Oversight

The situation has become even more muddled since the SEC is now going after Ripple for their XRP cryptocurrency, as reported by The New York Post,

“The SEC seemed to officially declare Bitcoin and Ethereum’s Ether a compliant crypto in a 2018 speech by Bill Hinman, the former head of the SEC Corporation Finance Division. Ripple’s defense hinges in part on using Hinman’s words against the commission; XRP was used in the same way the Ethereum people used Ether to finance the initial build-out of their platform. So what’s the beef?

This is where things get nonsensical on the part of the SEC. The commission is now arguing that whatever Hinman said, his speech meant nothing. It’s simply his opinion, nothing more. In court, the SEC is telling the crypto world it really hasn’t made an official ruling whether Bitcoin or Ethereum’s Ether comport with securities laws.

“I don’t want to be overly technical but … there is no action that [the SEC] took to say Bitcoin is not a security, Ether is not a security,” the SEC’s lawyer said.”

All new scrutiny is now being applied to Hinman and his determination regarding Ethereum, the motivations behind it and initial determinations that Bitcoin and other cryptos first were securities and then were not. Proving not only that the SEC has NO IDEA how to handle the new technological medium for exchange, but that they have been undeniably corrupt in their hamfisted attempts to do so. Time will tell if EMPOWR’s efforts and Ripple’s defense are successful. The future of US regulation of cryptocurrency is in the balance.

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