Lawsuit Filed Against Former SEC Executives Clayton & Hinman
Corrupt Roles Played in Ripple v. SEC Saga
Clayton & Hinman’s Involvement
Clayton was named Chairman of the SEC on May 4, 2017, by former President Donald Trump. Upon his resumption as the commission’s chairman, Clayton appointed Hinman to become the Director of the Division of Corporation Finance at the SEC on May 9, 2017.
Before Hinman’s appointment, he held a major post at the U.S. law firm Simpson Thacher, an organization that sits on the Enterprise Ethereum Alliance, which represents ETH’s financial interests.
In 2018, Clayton declared that Bitcoin is not a security, forcing its price to soar tremendously and it sealed its position as the largest cryptocurrency by market capitalization.
For clarity, Ethereum and Ripple were in a fierce rivalry over which digital currency would take the second position in the global cryptocurrency rankings.
Conflicts of Interest?
However, Hinman dashed Ripple’s hope of competing with Ethereum as the second-largest cryptocurrency by market capitalization by declaring that ETH is not a security. Like Bitcoin, Ethereum’s value spiked, leaving Ripple behind.
While Ripple was still trying to recover from comments made by Hinman, Clayton on his last day in office on December 4, 2020, charged Ripple and two of its executives for conducting unregistered security offering in the United States, more than seven years after the sales were made.
A few weeks after Hinman resigned from the SEC, he subsequently went back to his former company Simpson Thacher, where he was paid $15 million to cover his wages while he was away working with the Securities and Exchange Commission.
After Clayton left the agency in April 2021, he was made an advisor to One River Asset Management, a cryptocurrency company that focuses on Bitcoin and Ethereum.
Both Clayton and Hinman have been accused of indulging in numerous conflicts of interest, as recent emails suggest that the latter was still having meetings with Simpson Thacher even during his time as SEC Director, a move that breached the agency’s policy.
While no security agency has taken the mandate to investigate the alleged corrupt practices of Clayton and Hinman, O’Leary through the support of the XRP community would hope that the U.S. legal system proves these facts.