The U.S. Securities and Exchange Commission (SEC) is facing scrutiny over its handling of Bitcoin and altcoin regulation, with government watchdog Empower Oversight filing a lawsuit against the agency for its failure to comply with the Freedom of Information Act (FOIA). The case centers on the SEC’s decision in 2018, under then-Director William Hinman and Chairman Jay Clayton, to declare Ethereum (ETH) not a security. Empower Oversight claims that the SEC blocked its attempts to obtain documents related to this decision, raising concerns about potential conflicts of interest.
Lack of transparency in SEC’s decisions: Altcoin ETH is on the agenda
Empower Oversight filed a FOIA request seeking documents detailing Hinman and Clayton’s reasoning behind the altcoin ETH classification. The lawsuit alleges that the SEC did not provide any documents or commit to a timeline for their release. This lack of transparency impedes oversight and raises questions about potential ethical violations, according to Empower Oversight President Tristan Leavitt.
“The public has the right to see all documentation of how these public officials violated ethics rules and how the agency failed to hold them accountable,” Leavitt said. said. The case extends beyond Ethereum and includes the ongoing legal battle between Ripple and the SEC. Empower Oversight’s FOIA requests also sought information about the SEC’s approach to Bitcoin and potential conflicts of interest regarding cryptocurrencies in general.
Hinman and Clayton’s activities
Despite claims that explicit regulation is not necessary, the SEC remains unclear about which cryptocurrencies qualify as securities. This lack of definition creates uncertainty for both investors and businesses.
The lawsuit also highlights Hinman and Clayton’s post-SEC activities. Empower Oversight points to the involvement of firms with interests in the cryptocurrency industry as evidence of potential conflicts. Additionally, the group claims it has not received any updates from the SEC’s Office of Inspector General (OIG) regarding the investigation into Hinman and Clayton’s conduct. The OIG’s findings are seen as the potential deciding factor in the Ripple case.
It was noteworthy that the Debt Box case set a precedent
The lawsuit follows a recent court decision in the Debt Box case sanctioning the SEC for abuse of power and misleading the court. This decision, seen as a significant win for the cryptocurrency industry, raises questions about the SEC’s overall approach to cryptocurrency regulation.
cryptokoin.com As we reported, Ripple’s Chief Legal Officer Stuart Alderoty and Coinbase’s Chief Legal Officer Paul Grewal have publicly criticized the SEC’s handling of crypto regulations. They argue that the Debt Box decision carries implications for other ongoing SEC cases, including the Ripple case.
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