- John E. Deaton alleges conflicts of interest involving former SEC officials William Hinman and Jay Clayton.
- Deaton highlighted Hinman’s alleged violations of 18 USC 208.
- He further discussed Hinman’s relationship with Simpson Thacher and his involvement in the IPO of Canaan, as well as Clayton’s connections to One River.
John E. Deaton, a prominent figure in the crypto community, has brought to light serious concerns regarding potential conflicts of interest involving former U.S. Securities and Exchange Commission (SEC) officials. The allegations target former Director William Hinman and former Chairman Jay Clayton.
Deaton expressed his concerns and criticism in a detailed post on X:
Deaton’s allegations focus on Hinman’s connections to his former law firm, Simpson Thacher, where he was an active ongoing profit-sharing partner while working at the SEC. He emphasized that Hinman continued to meet with his partners at Simpson Thacher, even after the SEC’s Ethics Department directed him to stop.
These meetings occurred while Simpson Thacher had significant business pending before the SEC, including handling the IPO of Canaan, a company that manufactured Bitcoin and Ethereum mining equipment. Hinman met with his partners three more times, including meeting with Chris Lin from the China office, and collected profits from the IPO of Canaan. The SEC initially refused to turn over emails related to these matters until being sued by EMPOWR_us.
Furthermore, Deaton pointed out that Hinman’s law firm was a member of the Enterprise Ethereum Alliance, and he repeatedly violated 18 USC 208, a statute that makes it a violation if a member allows even an appearance of impropriety. Deaton also mentioned Hinman’s alleged profits from the Alibaba IPO and his connections to other partners in China, including details about Alibaba and Alipay’s failed acquisition of MoneyGram and Ripple’s subsequent acquisition of 9% of MoneyGram.
In addition to Hinman’s actions, Deaton responded to concerns raised by CryptoLaw, which questioned the appropriateness of investigating Clayton’s financial interests. Clayton filed a lawsuit against XRP on his last day in office and was then immediately hired by One River, a hedge fund that had made a $1 billion bet on BTC and ETH. Clayton’s connections to Sullivan & Cromwell, Consensys, JPMorgan, and the deal between Consenys and JPMorgan related to JPMCoin, a direct competitor to XRP, were also highlighted.
Previously, Deaton has also voiced frustration with political figures, such as Senator Elizabeth Warren, for ignoring concerns raised by crypto holders. His continued advocacy for accountability within the SEC is seen as a significant voice in shaping the future landscape of crypto regulation.
