Stuart Alderoty, the chief legal officer at Ripple, is calling for a new investigation into the former U.S. Securities and Exchange Commission’s (SEC) director Bill Hinman.
Specifically, he wants to unearth the reasons behind his 2018 speech on crypto transactions and the application of the Howey test.
In that speech delivered in June 2018, Hinman stated that Ethereum (ETH) shouldn’t be considered a security as it was “sufficiently decentralized,” something that caused confusion when the SEC later sued Ripple Labs for allegedly selling $1.6 billion worth of XRP as an unregistered security.
The documents related to Hinman’s speech were formally unsealed and made public on Tuesday, shedding light on the internal discussions that occurred among SEC staff at the time.
Delving into the behind-the-scenes events, Alderoty now claims that Hinman “invented factors” that should be taken into consideration when determining what “sufficiently decentralized” actually is.
He also urged the SEC to remove the speech from its website, as well as initiate an investigation into the former director.
“An investigation must be conducted to understand what or who influenced Hinman, why conflicts (or, at the very least, appearances of conflicts) were ignored, and why the SEC touted the speech knowing that it would create “greater confusion,” said Alderoty in a lengthy Twitter thread Tuesday.
According to Alderoty, the emails provide clear evidence that Hinman ignored multiple warnings that the speech contained “made-up analysis with no basis in law” and created “greater confusion” in the crypto market.
“Despite the SEC repeatedly flip-flopping on the significance of the speech in litigation, it remains on the agency’s website,” said Ripple’s chief legal officer.