How can we have confidence in the SEC, if conflicts of interest are left unchecked?
The S.E.C. has yet to set clear rules on cryptocurrencies, leaving the industry guessing. Maybe that’s just how the agency wants it.
On September 14th, the new chair of the Securities and Exchange Commission, Gary Gensler, appeared before the Senate Banking Committee to talk about how his agency planned to handle the financial markets during his term. He praised the American financial system, discussed the future of corporate bonds, and ruminated on how the rules of the stock market might be modified to make it more efficient. Soon, he turned to cryptocurrency markets, which are notoriously volatile, and adopted a darker tone. “Frankly, as I’ve said before, I think it’s more like the Wild West,” Gensler said. On another occasion, he had described cryptocurrency investments as “rife with fraud, scams, and abuse.”
Read the Full Article Here.
Posted in NewsTagged Amicus Curiae, ETH, Ethereum Foundation, SEC, SEC v Ripple, William Hinman, XRP
The Ethereum Free Pass, Fair Notice and the Fight Ahead
Posted on September 22, 2021
By John E. Deaton, Founder and Host, CryptoLaw.
I believe we have reached a turning point in the fight against the Securities and Exchange Commission’s unfair and abusive treatment of XRP holders in its lawsuit against Ripple. So much evidence has come out in this case that exposes the outrageous actions of the SEC and the key figures behind the lawsuit, that I felt it was important to send you a complete summary of what has happened, why it’s important, and what I and 20,0001 XRP holders are doing in this fight.
It is a story of an overreaching regulator unfairly picking winners and losers in the blockchain business space, a web of insider connections and conflicts of interest, and thousands of retail investors who were egregiously harmed by the federal agency that is supposed to be protecting them.
The Key Players:
First, it is important to remind everyone of the key figures in this story.
Jay Clayton was a longtime partner at the law firm of Sullivan & Cromwell, where he notably co-engineered the Alibaba IPO in 2014. Alibaba owns Alipay, the Chinese payments service that was designed to directly compete with western fintech innovations using blockchain. Alipay has moved into cross-border remittances which is Ripple’s primary use case for XRP. When he was nominated to be SEC Chairman in 2017, he was dubbed “the most conflicted SEC Chairman in history” in an article that ran down his baggage of potential conflicts in the job. At his nomination hearing, he was reminded (and conceded) that if any matter related to a client of his from Sullivan & Cromwell came before the SEC, he would be barred from voting.
William Hinman was a longtime partner at the firm of Simpson Thacher & Bartlett, and co-engineered the Alibaba IPO with Jay Clayton. Hinman “retired” from Simpson Thacher to join the SEC as Clayton’s Director of Corporation Finance.
Ethereum was launched by the Ethereum Foundation in 2014 as an enterprise blockchain system, and its native currency, ether, was issued in an ICO to “anyone who wants to purchase” it. An early investor and co-founder was Joe Lubin. In parallel, Lubin founded…
ConsenSys, a for-profit consulting firm to promote and profit from building enterprise blockchain solutions exclusively on the Ethereum network. Lubin received 9.5% of ether. For reference, a $10,000 investment in the ether ICO and held to this day is worth more than $120 million. Thus, you can imagine Lubin and anyone else’s financial interest in ether.
ConsenSys is a client of Sullivan & Cromwell (Clayton).
The Enterprise Ethereum Alliance, a coalition of companies built to market Ethereum as an enterprise solution, includes Simpson Thacher & Bartlett (Hinman).
This is how Clayton, Hinman and Lubin were connected as this story began.
https://www.crypto-law.us/tag/william-hinman/