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- Hinman report fails to resolve XRP lawsuit concerns, sparking frustration over regulatory transparency and fairness.
- Legal experts question SEC’s ethics, citing Hinman’s ETH ties and narrow investigation scope in the XRP case.
The long-running legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has entered a delicate phase following the release of the Inspector General’s (IG) report on former SEC Director William Hinman.
While the report was expected to clarify Hinman’s controversial 2018 speech, its findings have instead caused frustration among XRP supporters. Many within the Ripple community believe the report failed to address key concerns, adding further uncertainty to the ongoing lawsuit and the potential for a settlement.
The controversy comes as Ripple and the SEC recently withdrew their respective appeals in the case, which some see as a sign that a settlement could soon be reached. However, the unresolved issues in the Hinman report have led to fresh questions about regulatory transparency and fairness.
Legal Experts Raise Concerns Over Report’s Inconsistencies
Key legal experts closely involved with the XRP case have voiced criticism over the content and scope of the Inspector General’s report. Prominent attorney John Deaton, who has consistently defended XRP holders throughout the lawsuit, challenged the report’s credibility.
Deaton argued that the conclusion suggesting Hinman’s ownership of Ethereum (ETH) would not pose a conflict of interest contradicts SEC policies that explicitly prohibit employees from holding tokens to avoid ethical breaches.
I’ve seen white washing before but this one takes the frickin🎂
The IG is claiming that even if Hinman owned ETH when he gave the speech, it would not have constituted a violation, or even a conflict of interest. GTFOH
I challenge her to find an ethics lawyer who will support… https://t.co/vZDRfWIK0s
— John E Deaton (@JohnEDeaton1) April 11, 2025
Despite internal SEC warnings, Deaton further pointed out that Hinman continued to engage with Simpson Thacher, the law firm he previously worked for. He stated that one of the firm’s partners personally invested in the Canaan IPO, an Ethereum mining hardware manufacturer. Deaton further noted that these meetings cast doubts to the credibility and the neutrality of Hinman’s public utterances.
Narrow Scope of Investigation Criticized
More focus has been given to the brief nature of the IG’s investigation. MetaLawMan legal analyst emphasized that the investigation concerned criminal laws being allegedly violated by Hinman. Nevertheless, the report did not attempt to research other ethical concerns or potential conflict of interest that could have impacted Hinman’s 2018 speech where Declaring that Ethereum is not a security.
According to MetaLawMan, this approach overlooked major questions regarding the SEC’s internal governance and whether adequate safeguards were in place to prevent regulatory bias. Pundits have said that the inquiry should have asked whether Hinman’s speech was really personal as the XRP lawsuit claimed or whether it contained allocation decisions made by the SEC based on their self-interest.
Impact on XRP Lawsuit and Future Implications
The release of the Hinman report has added complexity to the XRP lawsuit, even as recent developments point to a possible resolution. This could mean that the SEC is weighing towards a settlement and as a result was ready to drop their appeal while Ripple has also dismissed its cross appeal. However, the continuing controversy regarding the conclusion of the IG report raises questions regarding the case’s result.
The unresolved questions surrounding Hinman’s actions could also have wider implications for the cryptocurrency industry. Regulatory clarity remains a critical issue for market participants, and the perceived shortcomings in the investigation could influence how future enforcement actions are viewed.
Nevertheless, for the Ripple community in particular, the case only goes to show the never-ending struggle with the unclear regulations. However, despite that, the legal battle related to XRP and this lawsuit settlement can now be seen as a medium-term problem, and the scandal with the Hinman report – only the beginning of an ongoing conflict on the part of the regulators’ unfair treatment of the cryptocurrencies.
