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Crypto supporter from SEC announces his resignation as a Director of Corporation Finance

Photo of: Sangeetha Golchha
by Sangeetha Golchha

William Hinman has been known for his undeterred work and attempts to steer forward the growth of the fintech ecosystem and better regulations especially towards decentralized digital assets. William Hinman, the director of the US Securities and Exchange Commission has announced that he will be giving up his post and will cease to do his duties as a director in a few months to come. 

William Hinman was a pro-cryptocurrency professional and his statements always intended to favor clarity for the crypto ecosystem and other fintech. As the Director of Corporation Finance, his office was responsible for providing the necessary information and guides to the investors so that they could make the best financial decisions. As a part of his work, his office was also expected to provide interpretative assistance and help to the company with respect to the rules of the watchdog. The Corporation Finance division was also vested with the duty to provide advice with respect to regulatory affairs in different sectors of the economy. 

As per the SEC press release, the official reasons behind his resignation is not known. He has thanked Jay Clayton and his team for their  “professionalism, expertise, and commitment to public service.”

Hinman’s work for a better crypto ecosystem

Hinman was a key entity in the creation of SEC’s Strategic Hub for Innovation and Financial technology. Also known as the FinHUB, it is a program aimed at facilitating fintech developments in the country. It also offers to advise on regulatory matters and also brings a clear picture of the criteria with respect to digital assets. Hinman has been known for his work for the cryptocurrency sector. His viewpoints often contrasted and conflicted with that of SEC on various aspects of blockchain technologies, ETFs, ICOs, and the likes. In one of his statements, he also favored Ethereum and declared that in his view it was not a security. 

Hinman saw that Ethereum’s decentralization made it impossible for it to have compatibility with SEC’s Howey test needs. This test is often used by the regulators to understand if a particular asset in question comes under the precinct of a security or not. 

In his famous speech “Digital Asset Transactions: When Howey Met Gary,” Hinman explained that despite Ethereum undergoing a funding round, it along with Bitcoin could not be securities. 

“Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”

SEC’s stance is tough

There has been a lot of regulatory uncertainty when it comes to cryptocurrency. SEC’s tough stance has proved disastrous for the crypto sector with the rejection of several projects like Libra, KIK’s KIN token, rejection of Bitcoin ETF, etc. Even Ripple has been at the receiving end of the stringent regulation and vigilance by the SEC. With his resignation, we only can wait and watch what effect it would have on crypto circles. Shelley Parratt, the present deputy director of the same division will temporarily replace Hinman.