Empower Oversight has sued the U.S. Securities and Exchange Commission (SEC) for failing to comply with the Freedom of Information Act (FOIA). The move comes as the SEC neither produced any documents nor committed to producing documents related to the ETHGate scandal when SEC officials declared Ethereum (ETH) as not a security.
Empower Oversight Files New Lawsuit Against US SEC
Empower Oversight has filed a lawsuit against the U.S. SEC for failing to turn over documents on why former Director William Hinman and former SEC Chairman Jay Clayton claimed that ETH was not a security.
The SEC’s refusal to comply with a FOIA request and new details about the firms Hinman and Clayton joined after leaving the SEC are clear evidence for further actions, claims Empower Oversight. The SEC under Gary Gensler has violated federal law that requires agencies to respond to FOIA requests within 20 days.
“By slow walking their response to our FOIA request, the SEC is stonewalling Empower’s oversight into SEC officials with conflicts of interest on cryptocurrency issues. The public has a right to see all documents that relate to how these public officials violated ethics guidance and how the agency failed to hold them accountable,” said Tristan Leavitt, President of Empower Oversight.
Empower Oversight also pressed the SEC for its handling of crypto issues, especially the Ripple vs SEC lawsuit. FOIA requests were focused on seeking transparency and answers from the SEC on Ethereum’s classification as non-security, along with Bitcoin and crypto conflicts of interest. Despite claiming there’s no need for further rulemaking to regulate crypto, the SEC has failed to answer which cryptocurrencies are securities and which are not.
Also Read: Is Meme Coin Hype Coming To An End?
Ripple Lawsuit Relevance and SEC Now Says Ethereum Is Security
The SEC has relied on the Howey Test and investment contracts to decide the securities status of various cryptocurrencies. CFTC Chairman Rostin Behnam testified before the House claiming inter-agency conflict concerns due to plans of Prometheum, the only broker-dealer registered with the SEC, to custody Ethereum and the SEC declaring ETH a security.
Meanwhile, Empower Oversight hasn’t heard from the SEC Office of Inspector General (OIG) after earlier claims that they are in the final stages of investigating Hinman and Clayton. The OIG’s conclusion of the investigation is one of the deciding factors for the SEC v. Ripple Labs lawsuit.
Also Read: Japan’s $1.5T Pension Fund Eyes Bitcoin and Gold for Diversification
SEC’s Continued Loss
Judge Robert J. Shelby’s opinion in Debt Box case sanctioning the U.S. SEC for abuse of power and lying in federal court is a big decision for the crypto industry. Finally, the court ruled in favor of Debt Box and asked the SEC to pay all legal costs for the defendants.
Ripple CLO Stuart Alderoty and Coinbase CLO Paul Grewal criticized the SEC and Gary Gensler and argues that the ruling has relevance in other crypto lawsuits.
Read More: Ripple, Coinbase CLO Call Out SEC for “Misleading” Courts In Other Crypto Suits
