Nikolas Sargeant
Empower Oversight, a nonprofit watchdog group, has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) to force the release of a long-delayed report investigating potential ethical conflicts and selective enforcement within the agency. The report, completed by the SEC’s Office of Inspector General (SEC OIG) over a year ago, examines possible conflicts of interest involving William Hinman, the former Director of the SEC’s Division of Corporate Finance. Despite multiple Freedom of Information Act (FOIA) requests, the SEC has failed to release the report or provide any related documents.
The lawsuit focuses on Hinman’s controversial role in the SEC’s decisions regarding cryptocurrencies, particularly his 2018 speech where he declared Ether (ETH) was not a security while other digital assets were classified as unregistered securities. Hinman’s prior ties to his former law firm, Simpson Thacher, which had a vested interest in promoting Ether, have raised questions about the impartiality of his actions. Empower Oversight has been pushing for greater transparency from the SEC since August 2021, seeking access to documents that would shed light on the agency’s handling of cryptocurrency regulations and enforcement.
SEC’s evolving crypto posture
With the inauguration of President Trump, the SEC has been with pro-crypto appointees, such as Marc Uyeda. One of their major decisions was adding extra layers of oversight to avoid excessive crypto probes. The new administration continues its move towards a more crypto-friendly regulatory environment.
As the SEC continues to withhold the report, Empower Oversight’s legal battle remains an important chapter in the ongoing debate over transparency and accountability in government oversight of the cryptocurrency sector. The outcome of the lawsuit could have significant implications for future regulatory decisions, especially as the SEC’s role in digital asset enforcement continues to evolve.
