Empower Oversight and Former Ethereum Adviser Challenge SEC’s Transparency

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The U.S. Securities and Exchange Commission (SEC) is again under the limelight, this time due to the pursuit of clarity and accountability by Empower Oversight and Steven Nerayoff, an early Ethereum adviser. 

Jason Foster, Founder of Empower Oversight, recently made headlines by filing a new Freedom of Information Act (FOIA) request that targets Jay Clayton, the SEC’s former Chairman. The organization focuses on potential conflicts of interest that might have influenced Clayton during his SEC tenure.

After issuing a FOIA request last December centered around Clayton’s association with One River Asset Management. This latest request seeks to include communications Clayton had with others, such as Jasmine Burgess and John D’Agostino, between May 2017 and December 2020.

XRP Community Responds

The FOIA request is particularly relevant given that Clayton joined One River Asset Management after stepping down from the SEC—a crypto hedge fund. This firm focuses on Bitcoin and Ether, cryptocurrencies that benefited from the SEC’s selective enforcement action. This is significant because Clayton’s SEC had filed a lawsuit against Ripple Labs, designating XRP as a security, a move that has perplexed and infuriated the XRP community. 

Attorney John Deaton, representing thousands of XRP holders, pointed out Clayton’s lack of transparency with other SEC commissioners. Bill Morgan, a pro-XRP lawyer, hailed Empower Oversight’s FOIA submission as a “perfect summary” of Clayton’s conflicting interests.

Ethereum’s “Free Pass” under Question

Simultaneously, Steven Nerayoff, an early adviser to Ethereum, publicly challenges the SEC’s historical treatment of cryptocurrencies. Nerayoff specifically criticized William Hinman, the SEC’s former director of the Division of Corporation Finance, for his landmark 2018 speech declaring Bitcoin and Ethereum as non-securities, granting “Ethereum Free Pass.” Nerayoff’s comments intensify calls for transparency and question the SEC’s alleged bias. 

Steven Nerayoff’s criticisms center around the secrecy and alleged bias in this formative regulatory milestone. Nerayoff goes further, insinuating that the SEC is “hiding more than motives” behind Hinman’s speech.  The intertwining of these two issues portrays an SEC that may be playing favorites, or at the least, operating within an opaque decision-making process.