Ripple’s chief legal officer has called for an investigation into the motivations that led to former Securities and Exchange official William Hinman delivering his now-infamous speech in 2018.
Stuart Alderoty’s demand for an investigation came as part of a June 13 Twitter thread following the public release of the Hinman documents. The documents revealed that Hinman’s speech was delivered despite warnings from other SEC divisions.
13/An investigation must be conducted to understand what or who influenced Hinman, why conflicts (or, at the very least, appearances of conflicts) were ignored, and why the SEC touted the speech knowing that it would create “greater confusion.”
— Stuart Alderoty (@s_alderoty) June 13, 2023
In the 2018 speech, Hinman asserted that Ether (ETH) is not a security as a result of it becoming “sufficiently decentralized” before elaborating on what factors must be satisfied when making that determination.
Alderoty argued that according to the newly released documents, Hinman had ignored the warnings of other SEC officials suggesting “his speech contained made-up analysis with no basis in law” and that the speech ended up sending confusing messages to the cryptocurrency industry regarding what constitutes a security.
Alderoty said that unelected bureaucrats should only apply the law rather than trying to create new ones, and added that “Hinman’s speech should never again be invoked in any serious discussion about whether a token is or is not a security.”
Ripple CEO Brad Garlinghouse joined Alderoty in his criticism of the regulator in a June 13 Twitter thread, arguing that the decision to go ahead with the speech despite “so much pushback” was “unconscionable.”
It’s absolutely unconscionable that a regulator – when presented with so much pushback on what he was about to say / how he compiled this fake “test” in the first place – decided to move forward anyway, and throw an entire industry into chaos. https://t.co/9qzKOiPWsA
— Brad Garlinghouse (@bgarlinghouse) June 13, 2023
Speaking with Pandoraland, pro-XRP lawyer and CryptoLaw founder John Deaton noted that he also believes an investigation is warranted, adding that the fact that Hinman had referred to the speech as the “Ether Speech” raised questions about what motivated the speech.
Deaton and Alderoty’s comments on Hinman’s motivations seem to reference Hinman’s alleged ties to the Enterprise Ethereum Alliance, an advocacy organization that seeks to drive the use of Ethereum blockchain technology.
Before and after working with the SEC, Hinman worked at the law firm Simpson Thacher & Bartlett LLC, which was a member of the Ethereum Enterprise Alliance.