- The SEC has cleared former official Bill Hinman of ethics violations related to his 2018 speech declaring Ethereum not a security.
- However, critics argue the decision highlights ongoing concerns about regulatory favoritism and transparency, reigniting the ETH Gate debate.
The long-simmering ETH Gate controversy has flared up once again after the U.S. Securities and Exchange Commission’s (SEC) Office of Inspector General (OIG) released a redacted report clearing former SEC official Bill Hinman of ethics violations. The decision comes despite Hinman’s 2018 declaration that Ether (ETH) was not a security—an assertion that critics say gave Ethereum an unfair regulatory advantage.
Also read: The long-simmering ETH Gate controversy has flared up once again after the U.S. Securities and Exchange Commission’s (SEC) Office of Inspector General (OIG) released a redacted report clearing former SEC official Bill Hinman of ethics violations. The decision comes despite Hinman’s 2018 declaration that Ether (ETH) was not a security—an assertion that critics say gave Ethereum an unfair regulatory advantage.
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Hinman, who served as Director of Corporation Finance, sparked headlines in 2018 when he stated at a Yahoo Finance summit that ETH was not a security. At the time, his former law firm, Simpson Thacher & Bartlett LLP, was a member of the Enterprise Ethereum Alliance, raising red flags for potential conflicts of interest. Watchdog group Empower Oversight filed a FOIA request to unearth whether Hinman’s ties compromised his impartiality.
According to the newly released OIG report, Hinman had disclosed his financial interests in Simpson Thacher upon joining the SEC and followed all ethics counsel guidance. The report found that his interactions with the firm, including referring a recruiter to a former colleague and maintaining “miscellaneous contacts,” did not violate internal or federal rules.
But many remain unconvinced.
The redacted nature of the report—and the revelation that internal SEC legal staff opposed Hinman’s ETH stance—has only fueled claims of regulatory favoritism. Critics argue that Hinman’s speech may have steered the market in Ethereum’s favor while similar clarity was withheld from other crypto projects.
CryptoLaw, a legal advocacy group following the case, voiced its frustration on X, saying, “The @SECGov OIG actually said that EVEN IF Hinman had a direct financial interest in ETH, his 2018 speech declaring ETH to not be a security would not amount to a conflict of interest.”
With ETH Gate back in the spotlight, the crypto community is once again questioning the SEC’s transparency and how it defines conflicts of interest. While Hinman may have been cleared on paper, the court of public opinion remains sharply divided—and the call for clearer, fairer crypto regulation has never been louder.
