In another crypto Feud involving the US Securities and Exchange Commission, Empower Oversight, a non-profit organization committed to promoting government transparency and accountability, has filed a complaint against the SEC in the District of Columbia. The complaint seeks to compel the regulatory agency to comply with a Freedom of Information Act (FOIA) request by Empower Oversight in December 2022.
Former SEC Officials Under Scrutiny
Empower Oversight initially submitted the FOIA request in August 2021 to obtain all communications regarding cryptocurrencies between senior SEC officials and their former and future employers and related entities. This request was made in light of concerns over conflicts of interest and selective enforcement by former high-level officials regarding cryptocurrencies.
BREAKING: Govt Watchdog Sues @SECGov Again, Opens Second Front in Fight for Detailed Hinman, Clayton Emails, Phone Logs, Meeting Notes with Names Entities, Individuals https://t.co/14AWr7CANC
— CryptoLaw (@CryptoLawUS) May 11, 2023
Specifically, the request sought to shed light on the actions of former senior SEC official William Hinman, who allegedly received millions of dollars in compensation from his former employer, Simpson Thacher, while helping guide the SEC’s enforcement decisions on cryptocurrencies.
Simpson Thacher was part of a group that promoted Ethereum, a cryptocurrency that Hinman publicly declared was not a security. At the same time, the SEC claimed in enforcement actions that other similar cryptocurrencies were unregistered securities.
Empower Oversight has been leading the charge for transparency at the SEC, filing a lawsuit against the agency in December 2021 in the Eastern District of Virginia to compel the release of responsive documents to their FOIA requests. In February 2023, the organization supported a motion with Judge Analisa Torres in the Southern District of New York to gain access to pertinent SEC documents.
Tristan Leavitt, President of Empower Oversight, criticized the SEC for their stonewalling of attempts to shed light on conflicts of interest at the agency. Leavitt stated that the SEC’s failure to provide transparency makes the situation look even worse.
The Fight For Accountability In Crypto Regulation
In May 2022, Empower Oversight sent a referral to the SEC Inspector General based on documents that raised questions about former senior SEC official William Hinman’s conflicts of interest regarding cryptocurrency issues, contacts with his former law firm Simpson Thacher, and that firm’s interest in promoting one cryptocurrency over others.
Hey @SECGov, this is not a game. The law requires you to do these searches and you have known it all along.
Time for the foot-dragging and dishonesty to stop. Be serious professionals. Do the searches and produce the documents.
From our complaint, available here:… https://t.co/pocmaHE3tq pic.twitter.com/0FhKGuPo61
— Jason Foster (@JsnFostr) May 11, 2023
Furthermore, Jason Foster, Founder of Empower Oversight, has criticized the SEC’s handling of Freedom of Information Act requests related to conflicts of interest and selective enforcement in the cryptocurrency industry. In a tweet addressed to the SEC, Foster called on the agency to stop foot-dragging and dishonesty and to comply with the law by conducting the necessary searches and producing the requested documents.
Foster emphasized that the SEC’s failure to comply with FOIA requests is not a game and that the agency has a legal obligation to conduct the necessary searches and produce the requested documents. He called on the SEC to act as serious professionals and take government transparency and accountability seriously.
The lack of transparency from the SEC regarding conflicts of interest and selective enforcement in cryptocurrency cases has raised concerns among stakeholders in the industry. The outcome of Empower Oversight’s latest lawsuit could have significant implications for regulating cryptocurrency and the importance of government transparency and accountability.
Featured image from iStock, chart from TradingView.com
