John Deaton Calls for Transparency On Hinman Case

by

As a seasoned analyst with over two decades of experience in the financial sector, I find myself increasingly concerned about the ongoing controversy surrounding former SEC Director William Hinman and the SEC’s handling of cryptocurrency regulation. The call for transparency by pro-crypto lawyer John Deaton echoes my own sentiments.

Lawyer John Deaton, an advocate for cryptocurrency, has urged for openness concerning the ongoing dispute involving ex-SEC Director William Hinman. He underscores the importance of making public the SEC Inspector General’s (IG) report, which delves into possible conflicts of interest that Hinman may have had.

As a researcher delving into this fascinating field, I’ve found myself increasingly intrigued by the escalating debate surrounding the Securities and Exchange Commission (SEC) and its approach to cryptocurrency regulation, with a particular focus on Ethereum and Ripple‘s XRP.

John Deaton Presses For Release of Report

Through several posts on his platform, John E. Deaton has emphasized the importance of disclosing the conclusions from the IG’s report, either by outgoing US SEC chair Gary Gensler or incoming Chair Paul Atkins. In his latest post, John Deaton affirmed that a thorough investigation would uncover instances where U.S. financial conflict of interest laws were violated.

TIME TO RELEASE THE REPORT @GaryGensler.

If we are going to move forward – we do so with complete TRANSPARENCY.

If Gensler fails to publish the report, it’s imperative that Paul Atkins steps up to make it public promptly. Hester Peirce and other concerned parties should advocate for its immediate disclosure.

— John E Deaton (@JohnEDeaton1) December 17, 2024

In a recent post, John Deaton pointed out that regardless of any intentional wrongdoing, the truth of the situation is undeniable.

As an analyst, I’ve uncovered evidence suggesting a potential breach of 18 USC 208, which pertains to conflict-of-interest regulations within the U.S. government. Though the SEC Inspector General’s report may not reveal any procedural misconduct on the officials’ part, it’s crucial for the public to be informed about the outcomes of this investigation.

US SEC IG Report on William Hinman Completed

The disagreement began after William Hinman, who used to lead the Securities and Exchange Commission’s Division of Corporation Finance, made a speech in June 2018 saying that Ether, the cryptocurrency linked to Ethereum, was not considered a security. This statement influenced the crypto market significantly and became known as Ether’s “exemption”. However, it was later uncovered by Empower Oversight, a non-profit organization focusing on government oversight, that Hinman had potential conflicts of interest due to his past business ties with Simpson Thacher & Bartlett, his former law firm.

As reported by Empower Oversight, Simpson Thacher is linked with the Enterprise Ethereum Alliance, a group backing Ethereum. Documents obtained through the Freedom of Information Act suggest that the SEC Ethics Office earlier contacted Hinman about his financial ties to Simpson Thacher. The Ethics Office advised him to steer clear of any US SEC matters potentially related to Simpson Thacher. However, the nonprofit contends that Hinman disregarded these advisories, raising doubts as to whether Hinman breached federal ethics regulations.

Due to mounting public pressure, the Inspector General of the Securities and Exchange Commission (SEC) has completed their investigation into Hinman’s case. Yet, the findings of this inquiry have yet to be made public, and additional calls for transparency have been made since then.

Empower Oversight emphasized accountability by stating that the Ethics Office’s failure to enforce Hinman’s recusal raises questions about the SEC’s internal systems, suggesting a broader issue. Tristan Leavitt, President of Empower Oversight, highlighted that “those responsible for preventing Mr. Hinman from breaching his ethical responsibilities let him down.

Crypto Community Stance On SEC Regulation

Simultaneously, the case stirs up questions about Jay Clayton, the previous SEC Chairman. On his final day in office in 2020, Clayton endorsed the SEC’s move to sue Ripple Labs for selling XRP as a security. This has led some to wonder why Ethereum was not held accountable while XRP faced regulatory action.

Clayton, who’s currently facing significant stress due to the ongoing Ripple lawsuit and his continued involvement in cryptocurrencies, was recently chosen by Donald Trump as the nominee for the role of U.S. Attorney for the Southern District of New York.

New article confirms SEC OIG report on #Ethgate is COMPLETE: .

With Jay Clayton potentially being nominated, it’s crucial that both @realDonaldTrump and @ChuckGrassley be made aware of the contents of the report that the SEC Office of Inspector General seems to be concealing.

The SEC OIG should release it immediately.

— Tristan Leavitt (@tristanleavitt) December 17, 2024

Based on Clayton’s actions at the SEC, Deaton and other crypto supporters believe it’s crucial to disclose the findings from the Hinman investigation first, prioritizing this over the appointment process. This is particularly important given the recent cancellation of Commissioner Crenshaw’s renomination.

Following this, the ongoing disputes with Hinman and Clayton have sparked doubts about the SEC’s strategy regarding cryptocurrency oversight. The CEOs of Ripple, Brad Garlinghouse, and Tesla, Elon Musk, have voiced their criticisms of the SEC’s recent decisions, further emphasizing the need for a supportive regulatory climate for cryptocurrencies within the U.S.

Read More

2024-12-18 00:18