Empower Oversight, a watchdog group, has released a new batch of documents obtained through a Freedom of Information Act (FOIA) request yesterday, sparking outrage in the XRP community. The documents reveal a deeper involvement of Ethereum co-founder Joseph Lubin and his company, Consensys, in the controversial June 14, 2018, cryptocurrency speech by former SEC Director of Corporation Finance, William Hinman.
According to the documents released on August 3, 2023, “Joseph Lubin and his company, Consensys, played a much more central role than previously known in driving then-SEC Director of Corporation Finance William Hinman’s thinking and goals with his controversial June 14, 2018, cryptocurrency speech.” This speech has been a point of contention in the Ripple case, especially as the SEC has since claimed that other similar cryptocurrencies, including XRP, were unregistered securities.
🧵1. The @SECgov has now turned over 324 pages of new documents in response to our crypto conflicts FOIA requests. https://t.co/Axzz0cFyJF
— Empower Oversight (@EMPOWR_us) August 3, 2023
The documents also reveal that “Lubin also appears to have been responsible for bringing Hinman and Ethereum creator Vitalik Buterin together as the speech drafting advanced.” Furthermore, investors and attorneys closely associated with Ethereum “were prominent on the list” of a March 28, 2018, meeting on a crypto safe harbor proposal.
The documents also highlight a meeting between Hinman and Simpson Thacher partner Chris Lin, which was contrary to advice on conflicts of interest rules. The SEC Ethics Office had repeatedly warned Hinman since he was receiving millions of dollars in payments from Simpson Thacher while at the SEC.
Empower Oversight has been at the forefront of the battle for SEC transparency, filing numerous FOIA requests and lawsuits to compel the SEC to release documents related to its decision-making on cryptocurrency issues.
XRP Army Reacts
The release of these documents has sparked a strong reaction from the XRP community, also known as the “XRP army”, which has been particularly vocal in their criticism of the SEC’s handling of the situation.
Fred Rispoli, a lawyer at HODLaw, lauded Empower Oversight’s efforts, tweeting, “Great job Empower Oversight. SEC never thought these docs would see the light of day…”
Digital Asset Investor.XRP questioned the apparent double standards, tweeting, “Why was Bill Hinman doing backflips to accommodate Joseph Lubin and Vitalik Buterin while at the same time giving Brad Garlinghouse the run-around with the help of Jay Clayton and even coming back to the SEC after he left to make sure the Ripple lawsuit went through?”
Renowned XRP community member @Leerzeit went a step further, alleging misconduct at the SEC. “You are asking what the Inspector General did while he was watching Bill Hinman committing serious misconduct? Committing serious misconduct himself. The SEC is a criminal organization. There is just no way around it.”
Crypto Law founder, attorney John Deaton, highlighted the contradiction in Hinman’s deposition during the Ripple lawsuit, where he claimed he had not communicated with anyone outside the SEC about the content of his speech.
Deaton tweeted, “Recall that Hinman said he never communicated with anyone outside the SEC about the content of the June 14 speech. However, the Hinman doc showed that he met with Buterin a week before his speech on cryptocurrencies.”
Undoubtedly, these revelations will intensify the ongoing debate about the SEC’s handling of cryptocurrencies and its enforcement decisions. As the battle for transparency continues, the XRP army seemingly remains committed to holding the SEC accountable for its actions.
At press time, the XRP price was at $0.6577, holding just above the 200 EMA in the 4-hour chart.
Featured image from iStock, chart from TrdingView.com
