SEC Report on Hinman Sparks Controversy, Complicates XRP Case

Ripple supporters have expressed disappointment following the release of the SEC Office of Inspector General's report on former official William Hinman’s controversial speech on ETH’s status. The report, intended to clarify Hinman’s remarks, has instead sparked further criticism and raised questions about the SEC’s internal procedures and potential corporate influence. Legal experts and XRP supporters, including attorney John Deaton and MetaLawMan, have pointed out significant inconsistencies and alleged bias and ethical whitewashing in the report.

This development comes as the XRP SEC case nears a potential settlement. The SEC recently dropped its appeal, and Ripple withdrew its cross-appeal, but the release of the Hinman report has complicated the future prospects of the case. The report’s narrow scope and lack of transparency have fueled public mistrust in the agency, with many questioning the commission’s decision-making processes and possible favoritism toward certain digital assets.

Legal analysts have scrutinized the Hinman document, expressing frustration with its evasiveness and perceived bias. John Deaton, a prominent Ripple supporter, criticized the report, calling the Inspector General either incompetent or willfully misleading. Deaton highlighted that the report’s claim that Hinman’s Ethereum holdings did not constitute a conflict of interest contradicted the agency’s ethics regulations. Further investigation by Deaton revealed meetings between Hinman and his previous firm, Simpson Thacher, despite warnings from the Commission’s ethics staff. Simpson Thacher’s ties to the Canaan IPO, which involved ETH mining equipment, suggested possible favoritism toward Ethereum, raising doubts about Hinman’s actions and the commission’s oversight mechanisms.

MetaLawMan, a legal expert monitoring the XRP SEC case, criticized the document for its narrow scope, stating that the inquiry focused only on whether Hinman committed crimes, overlooking broader ethical and procedural issues. This restricted focus created the suspicion that the report mainly aimed to protect the SEC’s reputation. Additionally, the document’s completion under current Chair Gary Gensler’s leadership suggested possible institutional bias within the agency, increasing worries for crypto supporters who argue that the commission continues to operate under unclear decision-making processes. Critics worry this situation could harm broader regulatory reform efforts and public faith in cryptocurrency oversight.

The publication of the Hinman document coincides with crucial developments in the ongoing Ripple lawsuit. Both the regulator and the company recently withdrew their appeals, leading many to expect a quick settlement soon. However, the controversy around this report has revived discussions about the lawsuit’s basis and the impartiality of key regulatory officials. Some legal experts predict an upcoming settlement, but others warn that the report’s inconsistencies might cause delays. The report casts doubt on the validity of Hinman’s speech, a key element in the SEC case. This development potentially allows Ripple to further challenge the agency’s narrative, shaping future lawsuits involving digital assets.

For now, the SEC Hinman report leaves the XRP community facing more questions instead of getting clear answers. Rather than providing closure, this release has raised serious concerns about the SEC’s actions and accountability. Ripple supporters argue that the report’s flaws emphasize the need for better oversight and changes within the Commission. Looking ahead, the Ripple lawsuit is a key test for American regulators’ approach to crypto oversight. The issues surrounding Hinman’s speech and the related report highlight difficulties in applying securities law to evolving digital markets. Whether the report will benefit Ripple is uncertain, but the legal battle is far from over.