The US SEC’s Office of Inspector General (IOG) recently released an investigation report regarding allegations against former high-ranking employee Bill Hinman. Whistle-blowing firm Empower Oversight (EMPOWER) confirmed the receipt of the ten-page document after years of requesting it. The report addressed the accusations against Bill Hinman, the former US SEC’s Corporation Finance Director.
EMPOWER had accused Hinman of using his position to advance his personal interests and those of his former employer, a violation of the US SEC’s ethics and conduct. However, the IOG’s report concluded that the allegations were unfounded.
Case Etymology
Bill Hinman joined the US SEC in May 2017 after working at the prestigious US law firm Simpson Thacher & Bartlett (STB) for 16 years. STB was part of the Enterprise Ethereum Alliance, a group dedicated to promoting the Ethereum network. Controversy arose following Hinman’s 2018 statement in an interview with Yahoo Mail, where he declared that Ethereum was not a security. EMPOWER raised concerns about this statement, as it contradicted the SEC’s actions against companies like Ripple in subsequent enforcement actions.
EMPOWER alleged a conflict of interest in Hinman’s speech, claiming that he colluded with his former colleagues to benefit the Ethereum network. They also suggested that his statement may have led to personal gains for the SEC director and requested access to communication records between Hinman and STB.
EMPOWER Reacts as US SEC Acquits Hinman
After years of legal proceedings, the SEC finally released details of its investigation on April 10. The report, dated December 9, 2024, dismissed EMPOWER’s allegations. It stated that Hinman did not violate any conflict of interest laws and that his Ethereum speech did not impact his financial status. The report emphasized that Hinman complied with ethics rules, including adjusting his retirement annuity with STB to a fixed rate upon joining the SEC.
However, EMPOWER criticized the report, claiming it had a limited scope. Jason Foster, the founder of EMPOWER, insisted that the IOG failed to address whether Hinman had committed a crime by maintaining contact with his former firm while serving in a sensitive role at the SEC. Foster also raised concerns about selective enforcement within the SEC, specifically regarding Ethereum’s classification as a non-security and XRP’s opposite designation.
In a heated exchange with Cardano founder Charles Hoskinson, XRP supporters highlighted the issue of selective litigation, accusing Hinman and his team of involvement in the SEC’s lawsuit against Ripple in 2020. This controversy underscores the ongoing debate surrounding regulatory actions in the cryptocurrency space.
Overall, the investigation report shed light on the allegations against Bill Hinman and the complexities of regulatory oversight in the digital asset industry. The findings have sparked further discussions about conflicts of interest, selective enforcement, and the role of former industry insiders in shaping regulatory decisions.