SEC Watchdog Clears Former Director Over Crypto Speech Disclosure

Key Highlights:

• SEC’s internal probe found William Hinman followed all crypto ethics rules during his 2017–2020 tenure.
• Hinman’s fixed annuity from STB was cleared by federal ethics officials to avoid conflicts.
• OIG found no evidence Hinman’s 2018 Ether speech financially benefited him or his firm.

An internal investigation by the U.S. Securities and Exchange Commission’s Office of Inspector General (OIG) has concluded that William Hinman, former Director of the SEC’s Division of Corporation Finance, did not violate ethics regulations during his tenure.

The report, issued in December 2024 and released publicly in April 2025, examined Hinman’s relationship with his former law firm, Simpson Thacher & Bartlett LLP (STB), and his 2018 public statements on Ether. The findings, reported by Journalist Eleanor Terrett, have sparked mixed reactions across the crypto community, while questions raised by watchdog group Empower Oversight remain unresolved.

Ethics Clearance and Mitigation Measures

Hinman served at the SEC from May 2017 to December 2020, after retiring from a partnership at STB. During the onboarding process, he disclosed his financial relationship with STB, including a retirement annuity based on firm profits.

In response, the SEC’s Office of the Ethics Counsel (OEC) consulted the U.S. Office of Government Ethics (OGE), which advised that the conflict could be mitigated if the annuity was fixed rather than variable. Hinman complied by arranging to receive a fixed annuity through the end of 2020. Afterward, his pension would revert to a profit-sharing structure.

In addition to financial disclosures, the OIG reviewed Hinman’s interactions with STB during his SEC tenure. The report noted that when Hinman responded to a recruiter by referring them to a partner at STB, the action did not violate recusal obligations. OIG found that these contacts, described as miscellaneous, did not breach the ethics guidelines or instructions he had received.

Public Remarks and Impact on Ether Crypto

A key focus of the investigation involved Hinman’s 2018 speech at the Yahoo Finance All Markets Summit. In that speech, he stated that offers and sales of Ether were not securities transactions, based on the Ethereum network’s decentralized structure. The OIG reviewed the process behind the speech and determined that Hinman followed all applicable ethics protocols while preparing and delivering it.

Empower Oversight, the nonprofit that referred Hinman’s conduct for investigation in May 2022, argued that his remarks led to a rise in Ether’s market value. However, the OIG found no evidence linking Hinman’s comments to a direct financial benefit for him or STB.

It also stated that his statements did not constitute personal or substantial participation in any particular matter pending before the SEC. The report emphasized that no evidence was uncovered to suggest that Hinman had any financial interest in Ether or any other digital asset during his time at the SEC.

Meanwhile, the report also clarified that STB’s involvement in the Ethereum Alliance, an industry group, did not result in a conflict. According to OIG, the connection between Hinman’s speech, Ether’s regulatory status, and STB’s membership in the Alliance did not present a direct and predictable financial benefit.

Watchdog Response and Public Commentary around Crypto

Empower Oversight, led by President Tristan Leavitt, challenged the scope of the OIG’s findings. The organization stated that the investigation failed to address broader structural concerns. It pointed to previously released internal emails suggesting that Hinman was warned certain actions could constitute a violation.

Empower maintained that narrowing the inquiry allowed the Inspector General to avoid holding officials accountable.

Online commentary reflected sharp division. In response to the post by Eleanor Terrett, one user remarked that the timing of the report’s release appeared strategic, suggesting it was designed to boost Ether’s value and deflect concerns over so-called “ETHGATE.” The same user criticized what they saw as a lack of enforcement or accountability.

Another commenter wondered how the report could clear Hinman if ethics office emails advised against the particular actions that he allegedly subsequently took. They said this was frustrating because they perceived consequences were necessary. In contrast, a third user dismissed the controversy, summarizing the outcome as a “nothing burger” and noting that Hinman had followed internal protocols.