Pro-XRP Lawyer Asserts ‘ETH Gate’ Is Real as CPAC Acts

Pro-XRP lawyer Bill Morgan accuses SEC of bias favoring Ethereum over XRP. CPAC backs these claims, filing formal complaints against ex-SEC’s Hinman.

Pro-XRP lawyer Bill Morgan once again accused the Securities and Exchange Commission (SEC) of biased regulation, accusing them of unfairly favoring Ethereum against XRP in a social media post. This claim is consistent with a more significant charge against former SEC employee William Hinman, which is now leading to formal complaints from the Conservative Political Action Conference (CPAC).

Morgan’s scathing remarks first appeared on X, where he sarcastically voiced his displeasure with “ETH Gate” and said, “But it’s all just a big plot by the XRP community.” It’s an excellent summation, even before you consider that the SEC began looking into Ripple in April 2018—when XRP was ranked third in terms of market capitalization behind Ethereum—while dozens of SEC employees and lawyers were working on the Hinman speech draft. How dishonest a regulator could be.

XRP Army Obtains CPAC Support

His remarks follow an upsurge in the legal and moral investigation against former Securities and Exchange Commission (SEC) employee William Hinman, spearheaded by the Conservative Political Action Conference (CPAC) Foundation. CPAC has filed formal complaints against Hinman’s SEC tenure, alleging unethical behavior and probable conflicts of interest, to the New York and California Bar Associations through its Center for Regulatory Freedom.

The accusations originate from Hinman’s seminal 2018 lecture in which he explained Ethereum’s (ETH) regulatory position and said it shouldn’t be categorized as a security. This decision has had a significant impact on the cryptocurrency market.

“Mr. Hinman’s affiliations and actions while serving in a high-ranking SEC role raise serious ethical questions that warrant a thorough investigation by the respective Bar Associations,” said Andrew Langer, Director of the CPAC Foundation’s Center for Regulatory Freedom, in the complaint.

The crux of the dispute revolves around William Hinman’s associations and career trajectory. In May 2017, Hinman was named Director of the SEC’s Division of Corporation Finance following his resignation as a partner at Simpson Thacher & Bartlett (STB), a company well-known for its financial services and engagement in the blockchain space.

Notably, Hinman freed Ethereum from the strict regulatory scrutiny that is applied to securities transactions with a speech he gave in June 2018. This speech effectively distinguished Ethereum from securities.

Simpson Thacher’s participation in the Enterprise Ethereum Alliance (EEA), a group devoted to encouraging Ethereum use across various industry sectors, aligned with this speech. The apparent conflict of interest is emphasized in CPAC’s complaint by emphasizing that Ethereum’s improved market position—presumably affected by Hinman’s regulatory guidance—was advantageous to Hinman’s former company.

CPAC’s complaint primarily draws from internal SEC emails and external correspondence, including conversations with Ethereum’s co-founder Vitalik Buterin before Hinman’s 2018 address. The lengthy discovery procedure in the ongoing SEC action against Ripple Labs produced these materials. Some critics, including pro-XRP attorney Bill Morgan, have argued that Ripple received worse regulatory treatment than Ethereum because the SEC classed its XRP coin as a security in a complaint from late 2020.

XRP was trading at $0.52907 at the time of publication.