SEC Clears Hinman in ETH Speech Conflict Review, Empowers Oversight Disputes Scope

Jason Foster, founder of Empower Oversight Whistleblowers & Research (EMPOWR), has disclosed that the U.S. Securities and Exchange Commission's Office of Inspector General (OIG) has released its long-awaited report examining potential conflicts of interest tied to former SEC official William Hinman’s 2018 Ethereum (ETH) speech. The report concludes there were no criminal violations or breaches of ethics.

Hinman, who joined the SEC in 2017 after 16 years at Simpson Thacher & Bartlett (STB), stated in his 2018 speech that Ethereum was not a security. Critics have argued that Hinman may have had a conflict of interest, given STB’s membership in the Ethereum Enterprise Alliance. However, the OIG report found that Hinman's speech had no “direct and predictable” effect on his financial interests and confirmed that he did not hold any crypto assets, according to his 2021 testimony.

Importantly, the report emphasizes that Hinman’s speech was not his personal opinion but was “collaboratively drafted” by multiple SEC divisions, including the decision to reference Ethereum. This undermines allegations that Hinman acted independently or inappropriately to benefit former associates.

Despite these findings, Empower Oversight has criticized the report for its narrow scope, arguing it focused solely on potential criminal misconduct rather than broader ethical concerns. The nonprofit maintains that the SEC’s internal review fails to fully address the implications of Hinman’s ties to STB and Ethereum-related interests.

The release of this report marks a key development in the ongoing scrutiny of the SEC’s approach to crypto regulation, especially in light of Ripple’s ongoing legal battle and broader debates about whether digital assets like ETH and XRP should be classified as securities. The SEC's integrity and transparency on crypto-related decisions remain a hot topic among industry observers.