The US Fed regulator, the SEC, which is being audited as an independent oversight organization, is trying to obtain internal communications from the SEC.
In a recent filing under the Freedom of Information Act filed with the court[FDA], Empower Oversight tried to maintain the agency’s internal communications.
William Hinman and the lawsuit
In light of the conflict of interest, the organization has asked the court to seek out the SEC’s internal notice on former and acting officials. Empower Oversight stated that while William Hinman was serving as director of corporate finance, Ripple’s competitor Ethereum may have benefited as in his 2018 speech, but he had stated that ETH does not serve as collateral. On the contrary, he made comments about XRP which had a negative impact on the token. According to Empower Oversight, there is a clear conflict of interest as Hinman received compensation from a company affiliated with Ethereum.
Jay Clayton and the lawsuit
William Hinman isn’t the only one undergoing a similar test. Rather, the organization also alleged former SEC chairman Jay Clayton, as it said while joining a BTC and ETH-focused crypto hedge fund One River Management, as it is a security.
The organization established as a result of the above conflict of interest may be affected by the lawsuit.
Handling of the lawsuit by the SEC
Empower Oversight also questioned the SEc’s handling of the lawsuit, as it said:
“The SEC later sued one of Ethereum’s competitors, Ripple, stating that its cryptocurrency, XRP, was security. Shortly thereafter, the value of XRP plunged 25%. After Hinman left the SEC in December 2020, he returned to Simpson Thacher as a partner. The head of the SEC department that filed the XRP lawsuit, Marc Berger, also left the SEC for Simpson Thacher.”
Since the agency filed the lawsuit against Ripple, it has been constantly targeted for the mishandling and ambiguity of the lawsuit.