XRP Price Trends: Ripple's Legal Battle Dictate Market Sentiment

The Office of Inspector General (OIG) at the U.S. Securities and Exchange Commission (SEC) has found that former Corporation Finance Director William Hinman violated ethics rules by continuing to meet with his former employer, a law firm that is part of a group promoting Enterprise Ethereum.

According to a report by Empower Oversight, Hinman received millions of dollars from the law firm, Simpson Thacher. Hinman was involved in discussions about whether bitcoin (BTC) and ether (ETH) should be classified as securities, and he ultimately made a statement in 2018 that they were not.

The OIG’s findings are based on an investigation that was launched after Hinman’s Hinman speech became a key piece of evidence in the SEC’s lawsuit against Ripple Labs. The SEC has been trying to classify XRP as a security since 2018, but the agency’s efforts have been hampered by Hinman’s statement.

The OIG’s report found that Hinman continued to meet with Simpson Thacher employees even after the SEC’s Ethics Division warned him against doing so. The report also found that Hinman did not disclose all of his meetings with Simpson Thacher to the SEC.

The OIG’s findings could have a significant impact on the SEC’s appeal of the Ripple case. The SEC is scheduled to file its opening brief in the case by January 15.

If the OIG’s findings are included in the SEC’s brief, they could bolster Ripple’s argument that the SEC’s case is based on shifting legal theories and inconsistent application of the law.

The OIG’s findings could also put pressure on SEC Chair Gary Gensler, who has been criticized for his handling of the Ripple case. Gensler is preparing to leave the SEC, and the OIG’s findings could complicate his efforts to secure a high-profile job in the Biden administration or the private sector.