Ripple’s Chief Legal Officer, Stuart Alderoty, has called for an investigation into the reasons behind the speech given by former Securities and Exchange Commission (SEC) official, William Hinman, in 2018. The speech delivered by Hinman has been the subject of much debate within the cryptocurrency industry, as it suggested that Ethereum (ETH) was not a security.
Details of the Speech
Despite warnings from other SEC divisions, Hinman went on to explain that ETH was “sufficiently decentralized” and outlined the factors that needed to be considered when making such a determination. However, Alderoty believes that Hinman ignored the warnings of other SEC officials and that his speech sent confusing messages to the cryptocurrency industry regarding what constitutes a security.
Alderoty argues that unelected bureaucrats should only apply the law rather than trying to create new ones, adding that “Hinman’s speech should never again be invoked in any serious discussion about whether a token is or is not a security.”
Criticism of the Regulator
Ripple CEO, Brad Garlinghouse, joined Alderoty in his criticism of the regulator in a June 13 Twitter thread. Garlinghouse argued that the decision to go ahead with the speech despite “so much pushback” was “unconscionable.”
Pro-XRP lawyer and CryptoLaw founder, John Deaton, also believes that an investigation is warranted. Deaton highlighted that Hinman’s alleged ties to the Enterprise Ethereum Alliance, an advocacy organization seeking to drive the use of Ethereum blockchain technology, raised questions about what motivated the speech.
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.
The Hinman documents were publicly released, which revealed the concerns that other SEC divisions had about the speech. Alderoty’s demand for an investigation came as part of a June 13 Twitter thread following the public release of the Hinman documents.
The speech given by Hinman in 2018 has been a subject of much debate within the cryptocurrency industry. Ripple’s Chief Legal Officer, Stuart Alderoty, has called for an investigation into the motivations behind the speech, highlighting that it sent confusing messages to the industry regarding what constitutes a security. Ripple CEO, Brad Garlinghouse, and pro-XRP lawyer and CryptoLaw founder, John Deaton, have also criticized the regulator for going ahead with the speech despite warnings from other SEC divisions.