US Firm Sues SEC, Accuses Officials Of Conflict Of Interest In Ripple Case

Since the Ripple-SEC lawsuit, the XRP ecosystem has alleged that the financial watchdog was biased against Ripple. Now, a legal action wants to prove that claim in court. 

EMPOWR Makes An Unusual Request 

An American-based organization is taking the SEC to court, alleging that two SEC top-level officials have reasons to favor the top digital assets. Hence, they are likely to be biased in their claims against Ripple. The NGO (known as EMPOWR), focusing on the government’s oversights and wrongdoings, is seeking redress over the matter at the Eastern District of Virginia court.

The organization seeks that the court asks SEC to release some specific recordings to prove the favoritism of those SEC officials with regards to digital assets. The EMPOWR is making this request based on the Freedom of Information Act.

Part of the request states that “there are vital questions that show conflicts of interest especially in the comments made by some ex-SEC executives on the criteria with which cryptocurrencies can be considered as securities and which falls under the purview of SEC’s regulation.”

Persons Tied To The Case 

EMPOWR’s first rebuttal was against Bill Hinman. The former SEC director was accused of receiving payment from his previous employment as a law firm partner at Simpson Thatcher throughout his tenure at the SEC. There were unconfirmed reports that his pay from Simpson Thatcher was nearly eight times his salary as an employee with the SEC.

While EMPOWR didn’t consider his payments from the law firm as a crime, it noted that the law firm is one of the members of Enterprise Ethereum Alliance, a group aimed at driving the wider adoption of the second leading digital asset. The EMPOWR organization further remarked that Hinman spoke on record that Ethereum didn’t constitute security three years ago.

Hinman resigned his appointment with the financial watchdog late last year, which coincides with when the SEC initiated its legal action against Ripple. The value of Ripple’s governance token (the XRP) dipped by 30% the moment SEC announced the lawsuit against Ripple. Marc Berger is another relatively unknown ex-SEC that EMPOWR tied to the case. Aside from heading the SEC’s enforcement department at the time, he was also taking important steps in the SEC-Ripple lawsuit. He left his position almost immediately after the lawsuit started and, coincidentally, started working at Simpson-Thatcher law firm, where Hinley remains a partner.

The Anti-Ripple Agenda Continues

It was when Jay Clinton was SEC chair that the SEC initiated its lawsuit against Ripple. Even though Clinton was succeeded in its position by Gary Gensler following a change in government, the anti-Ripple plan didn’t stop. Clinton was once quoted as saying that BTC isn’t a security, a statement that pushed up the price of BTC almost instantly.

Clayton left his position as SEC chief. Like Hinman and Berger, he also started working at a private consultancy company (one river asset management firm) focusing on digital assets, especially BTC and ETH. Part of the conclusion of EMPOWR’s lawsuit read thus, “there should be no objective bias on how the government’s financial regulators perform oversight functions on the fast-growing crypto industry. Hence, there should be no basis for any conflict of interest for the good of the people.”

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