In what could be described as a relentless pursuit for granular transparency regarding the Securities and Exchange Commission’s (SEC) prior actions vis-à-vis cryptocurrencies and Ripple, Empower Oversight Whistleblowers & Research—a rigorous watchdog entity—has spearheaded another incisive Freedom of Information Act (FOIA) endeavor. This stratagem is centered on elucidating the inter-communications of Jay Clayton, erstwhile SEC Chairman, with a pantheon of stakeholders deemed integral to the SEC’s often-controversial cryptocurrency enforcement paradigms.
Chronicle Of Ripple And Crypto Controversies
Spanning May 4, 2017, to December 23, 2020, Clayton’s incumbency in the SEC’s most prominent chair bore witness to a series of watershed moments. At its forefront was Clayton’s proclamation of Bitcoin’s non-security status—a sentiment reciprocated by other senior luminaries vis-à-vis Ether.
Bill Hinman gave his infamous speech in which he declared that ETH is decentralized and therefore does not constitute a security. As has since been revealed in the court case between Ripple and the SEC, Hinman defied the recommendations of other officials with the speech.
These assertions had a non-trivial amplification effect on the valuation kinetics of these digital assets. This upward trajectory, however, encountered turbulence with the SEC’s unanticipated legal offensive against Ripple, postulating the XRP token’s identity as a security. This litigation, when juxtaposed against Clayton’s subsequent alliance with One River Asset Management (a hedge fund with an exclusive portfolio concentration on Bitcoin and Ether), fanned the flames of conjecture.
Amidst these oscillations, Empower Oversight’s press release categorically enunciated: “Empower Oversight has submitted a new Freedom of Information Act (FOIA) request seeking communications between Jay Clayton… regarding the agency’s ostensible misalignment in cryptocurrency enforcement stratagems.”
In the labyrinthine construct of this freshly minted FOIA petition, directed at Raymond McInerney (the SEC’s chief FOIA custodian), Empower Oversight seeks to exponentially broaden the nexus of individuals potentially embedded within Clayton’s communication ecosystem. The roster, with names ranging from Jasmine Burgess to John D’Agostino et al., endeavors to crystallize any latent “conflicts of interest entwined within Mr. Clayton’s SEC stewardship.”
Industry Reactions
The entire saga has not gone unnoticed by stakeholders in the crypto space. Renowned pro-XRP attorney John E Deaton, airing his views via X (formerly Twitter), reflected, “When I first raised the HUGE conflicts of interests… I was called a conspiracy theorist by many in the industry […] Empower Oversight obtained emails proving Hinman, with Clayton’s full knowledge and tacit approval, violated, multiple times, 18 USC 208. Is Empower Oversight conspiracy theorists, as well?”.
Deaton further emphasized, “Let’s not forget, Clayton was the ONLY Commissioner to see and read the draft speech before it was given. Hinman did NOT send a copy to Hester Peirce. That’s right, Crypto-Mom didn’t get a heads up regarding the biggest speech in crypto history.”
At press time, XRP traded at $0.5027.
Featured image from Shutterstock, chart from TradingView.com
