EMPOWR Files Lawsuit Challenging SEC’s Inability to Comply with FOIA Requests Pertaining to Crypto Regulation

Empower Oversight Whistleblowers & Research (EMPOWR) is a nonprofit, nonpartisan organization dedicated to enhancing independent oversight of government and corporate wrongdoing, has filed a lawsuit challenging the Securities and Exchange Commission (SEC) to disclose conflicts of interest regarding the regulation of crypto.

EMPOWR has filed several Freedom of Information Act (FOIA) requests seeking to compel the SEC to reveal the actions of “former high-level officials” as the Commission continues to file suits against various crypto firms.

According to a statement by EMPOWR, a FOIA request was submitted in August “seeking any communications related to senior SEC officials and their current and former employers regarding cryptocurrencies.”

EMPOWR states that former senior SEC official William Hinman, previously Director of CorpFin at the SEC,  received millions of dollars in compensation from his former employer, Simpson Thacher, while helping guide the SEC’s regulation of cryptocurrencies.

Simpson Thacher is part of a group that promotes Enterprise Ethereum. At one point while at the SEC, Hinman announced that Ethereum wasn’t a security.

XRP, on the other hand, has been sued by the SEC as it alleges that the crypto is a security thus putting its value in question.

EMPOWR states that the person who brought the lawsuit against XRP, Marc Berger, left for Simpson Thacher shortly after Hinman did the same.

Additionally, EMPOWR claims that former SEC chairman Jay Clayton may have had conflicts of interest when he declared that Bitcoin was not a security.

After serving at the SEC, Clayton joined the advisory council of One River Asset Management, a fund that is active in digital assets.

EMPOWR reports that as of today the SEC has failed to comply with six of the eight categories of documents in their FOIA request.

EMPOWR states that the SEC claims that searches for two of the eight categories yielded no records relating to communications between Clayton or Berger and the SEC’s Office of Ethics Counsel regarding their future employers and any potential recusals.

The other six requests remain entirely unanswered.

Empower Oversight, part of EMPOWR, has filed a complaint against the SEC in the U.S. District Court for the Eastern District of Virginia to compel the SEC to comply with the other six categories of the FOIA request.  Empower Oversight is represented by Husch Blackwell.


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