- John Deaton praises Joseph Lubin’s strategic move in SEC v. Ripple case.
- Lubin swiftly hires law firm Sullivan & Cromwell after Jay Clayton’s SEC Chairman appointment.
- Move aims to create conflict of interest for Clayton, who had ties to S&C.
In a recent tweet, attorney and XRP advocate John Deaton pointed out a strategic move made by Joseph Lubin, co-founder of Ethereum, in the SEC v. Ripple case. Deaton praised Lubin’s actions as “brilliant and clever,” shedding light on a complex web of legal maneuvers involving former SEC officials, law firm Sullivan & Cromwell (S&C), and his blockchain firm Consensys.
Deaton’s analysis centered around Lubin’s decision to swiftly hire S&C shortly after Jay Clayton’s appointment as SEC Chairman. According to Deaton, this strategic move aimed to create a potential conflict of interest for Clayton, considering his past involvement with the law firm. He quoted:
It was brilliant and clever [because], at a minimum, it guaranteed that Clayton would recuse himself from voting related to an enforcement action against one of his law firm’s major clients.
Deaton further delved into the deposition of Bill Hinman, a former SEC official who delivered the controversial Ether speech. “Hinman reached out to Lubin [because] Clayton ‘suggested’ he do so,” the lawyer said. He alleged that Clayton’s outreach aimed to support S&C’s “representation” of Lubin and ConsenSys. Deaton noted:
My God, Clayton reached out to Hinman, asking him [about] how the meetings with Lubin and Consensys were going!
Furthermore, Deaton accused Hinman of violating conflict-of-interest statutes and pointed to his law firm, Simpson Thacher, having an Enterprise Ethereum Alliance membership. Hinman’s profits from his law firm following his declaration that BTC and ETH were not securities raise concerns about the ethical aspects of his actions during his time at the SEC.
The tweet also raises eyebrows about Clayton’s role post-SEC as he took a job at One River, which had made a substantial investment in BTC and ETH before Clayton voted for an enforcement action against Ripple, a major competitor to ConsenSys.
Deaton concludes, “Although I may hold other things against Lubin, no one can blame him for being smart and hiring S&C.” He expressed that had Ripple’s CEO and CLO taken a similar step, they would’ve likely prevented the lawsuit.
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