SEC Clears Bill Hinman in Ethereum Ethics Review, But Controversy Lingers

A long-running ethics dispute involving former SEC official Bill Hinman has reached a turning point—at least officially.

A new report from the SEC's Office of Inspector General has cleared former SEC official Bill Hinman of any ethics violations, despite a persistent narrative to the contrary.

The report, which was heavily redacted and focused on a period from 2017 to 2018, stemmed from a Freedom of Information Act request by Empower Oversight, a watchdog group. This request followed Hinman's famous 2018 speech, where he declared that despite the usual factors, he wouldn't view Ether as a security in the present market.

However, critics, like those pushing the so-called "ETH Gate" theory, maintain that the report ignores crucial details. They highlight how emails revealed that Hinman personally crafted and pushed for the Ethereum speech, encountering resistance from the SEC's legal team. This, they argue, contradicts the image of a neutral, rules-based agency.

The report also acknowledged that even if Hinman had direct exposure to Ether, it wouldn't qualify as a conflict of interest—a finding that sparked further debate. Transparency advocates like CryptoLaw and journalist Eleanor Terrett criticized this finding, questioning how such financial ties could be disregarded when they factor into public policy.

This controversy unfolds as changes are afoot at the SEC. Paul Atkins has just been confirmed as the new SEC Chair, and with pending cases against major crypto firms and growing calls for reform, the stage is set for a new chapter in crypto regulation and ethics enforcement. While Hinman might be cleared on paper, the court of public opinion may yet have the final say.