Empower Oversight Sues SEC Over Alleged Crypto Conflict of Interest

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Stack of legal documents and a gavel, representing Empower Oversight's lawsuit against the SEC over cryptocurrency conflict of interest.

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Empower Oversight Launches Legal Battle Against SEC

Empower Oversight, a nonprofit watchdog focused on promoting governmental transparency, has initiated a lawsuit against the United States Securities and Exchange Commission (SEC). The legal action stems from the SEC’s alleged failure to fulfill a Freedom of Information Act (FOIA) request concerning potential conflicts of interest related to cryptocurrency within the agency. This request highlights concerns surrounding William Hinman, who served as the SEC’s Director of the Division of Corporate Finance from May 2017 until December 2020.

US Government Agency Officials’ Financial Interests Called Into Question

The lawsuit puts a spotlight on Hinman’s tenure at the SEC, during which he reportedly continued receiving millions of dollars from his former employer, Simpson Thacher. This law firm is a member of the Enterprise Ethereum Alliance, and Hinman’s 2018 speech, which favored Ether, has raised eyebrows regarding ethical compliance. Empower Oversight’s efforts to uncover the truth through FOIA requests have so far been met with limited success, revealing Hinman’s potential financial and ethical conflicts during his service at the SEC.

Empower Oversight’s Pushes For Transparency In New Lawsuit

The nonprofit’s legal filing on March 15 marks a significant step in its campaign for greater agency transparency. This action follows the SEC’s Office of Inspector General’s failure to release records concerning financial conflict of interest issues, initially flagged by Empower Oversight in May 2022. The ongoing litigation seeks to force the SEC to disclose these records, thereby holding the agency and its officials accountable for any ethical violations.

Will The SEC Release The Records?

The lawsuit also examines comments by former SEC Chairman Jay Clayton on the security status of Bitcoin, juxtaposed against his subsequent affiliation with a Bitcoin and Ether hedge fund. Empower Oversight criticizes the SEC’s sluggish response to their FOIA request, accusing the agency of obstructing their investigative efforts. Tristan Leavitt, President of Empower Oversight, asserts that the public deserves full transparency regarding the alleged ethical breaches by SEC officials.

As the legal proceedings unfold, the outcome could have significant implications for the SEC’s handling of cryptocurrency regulation and transparency standards. Cryptonews.com has contacted the SEC for a response to these allegations.

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