Pro-crypto advocate John Deaton is accusing Bill Hinman, a former Director of the U.S. Securities and Exchange Commission (SEC), for “favoring” Ethereum (ETH) in his regulatory advisory tenure, owing to a controversial speech he gave in June 2018, which declared Ethereum and Bitcoin as non-securities.
The allegations resurfaced thanks to John Deaton’s recent statements in a lengthy post on X today, pointing out to Hinman’s conflicts of interest during his time at the SEC.
According to Deaton, Hinman, who was initially a partner but now advisor to the law firm Simpson Thacher & Bartlett, made millions from ongoing profit-sharing agreements with entities associated with ETH.
His remarks were focused on the former SEC director making a public declaration that Ethereum and Bitcoin are assets that do not “need subjective analysis” to determine they aren’t securities.
Hinman is connected to Ethereum
Dragonchain lawyer Deaton is calling out Hinman on his inconsistencies with crypto regulations, pointing out that after Hinman’s speech, SEC officials, including then-chairman Jay Clayton and commissioner Hester Peirce, repeatedly stated that it would be inappropriate for the SEC to offer specific comments on individual tokens.
Bill Hinman actually said that people are a little gun shy going into the SEC based on past experiences. 💀
Yet, Hinman’s speech on Ethereum seemed to contradict this rule. In his X post, Deaton referred to the speech as “Hinman’s Ether Speech,” noting that the speech was carefully drafted and reviewed by numerous SEC divisions. Notably, however, the SEC’s Ethics division was excluded from this process.
The accusations against Hinman extend beyond his speech. Deaton revealed that, prior to delivering the “Ethereum speech,” he had been warned multiple times by the SEC’s Ethics department about potential conflicts of interest. He allegedly continued to meet with his partners, many of whom had business dealings with Ethereum-related companies.
One such partner was involved with the Chinese company Canaan, which at the time was the world’s largest manufacturer of Ethereum mining equipment. In May 2018, Canaan filed its initial public offering (IPO) registration with the SEC.
Hinman’s remarks on Ethereum, which came just weeks later, was seen by some as a coincidental endorsement of the Ethereum project while his partner sought to launch Canaan’s IPO. Deaton claims that Hinman ignored these ethical concerns and continued meeting with the Chinese partner despite warnings from SEC ethics personnel.
“After he gave the speech, Hinman would speak at conferences like the one below. Back then, he would say only ETH & BTC had clarity (after he gave the clarity).” Deaton complained in his post. “And now he’s back, recycling the same bullshit and ignoring the Ruling that XRP is not a security from a case that he pushed to bring.”
Past actions that might ignite ‘ethical practices investigations’
In addition to his ties to Canaan, Hinman’s connections to Ethereum’s core group of supporters have been questioned. Deaton and others have pointed to Hinman’s meetings with Ethereum co-founder Vitalik Buterin.
The draft version of Hinman’s written speech when he met with Ether co-founder Vitalik Buterin in 2018, which has quite a number of redacted sentences as seen by some prior to its final publication, included a mention of the decentralization of Ethereum’s mining operations.
However, after meeting Buterin, the final version of the speech omitted this detail, which pro-XRP stans believe stems from Ethereum’s founders influence on Hinman’s decision-making process.
Moreover, Hinman’s speech is rumored to be “written” by lawyers from the venture capital firm Andreessen Horowitz (a16z), a firm that has been deeply involved in Ethereum-related investments.
The former SEC director now holds a position with a16z, which critics say is quit suspicious, further fueling allegations that he he used his voice to turn regulators away from scrutinizing Ethereum.
Adding to his flurry of queries, Deaton also referred to a prolonged legal battle between Ripple executives and SEC lawyers over whether Hinman could be deposed.
“Remember the battle over whether Hinman could be deposed, which he was? The lawyers at the SEC fought harder to stop that deposition than lawyers fight to stop a deposition of the President,” reiterated Deaton.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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