Hinman documented released and the SEC is accused of “Anti-guidance” a huge breaking news story.

Hinman documents

These are my interpretation of the documents authored by the former SEC Chairman Mr Hinman, so far.

• Howie Test is to old
• Cryptocurrency doesn’t fit into current security regulation
• A need to create new rules for a new technology
• A period of non-enforcement and government industry cooperation was recognized as necessary from the beginning
• The SEC chose to ignore these ideas and pursue a strategy of destroying the industry.

Hinman documents

• In the court case SEC versus XRP, XRP lawyers have finally succeeded in getting the judge in the case to release the famous Hinman Documents. The SEC has fought fiercely to prevent this, and now we know why. Mr Hinman, the former Chair of the SEC, before the current Chair Gary Gensler wrote extensively on cryptocurrency, and how it didn’t fit into the Securities Enforcement law regulatory framework known as the Howie Test .
• The former chair wrote extensively on the topic and on how not issuing new regulations would throw the cryptocurrency industry into disarray, create chaos which would attract bad actors and potentially result in large financial losses for investors in this emerging financial technology.
• So at first glance it looks like Chairman Hinman was a prophet, who could see the future. As everything he feared could happen, has happened and indeed huge financial losses for investors is common in cryptocurrency.
• Lastly he wrote extensively on the need for the SEC to establish a friendly working relationship with the industry leaders to police the industry in a transparent manner including a period of no enforcement as the government, the industry and society learned more about this new emerging technology.
• This simple inciteful strategy didn’t require a genius level intellect, it just required an intellectually honest appraisal and a strong sense of fairness and commitment to the SECs core missions; protect the investors, protect the financial markets and nurture financial innovation with the USA.

This is my preliminary interpretation of what these documents suggest the SEC has been doing

Anti-guidance

• “Anti-guidance” an organized pattern of “entrapment and regulation by enforcement” .
• The Hinman documents lay out reasoning and a plan for the US Government regulatory body, the SEC, to recognize why 90 year old rules can’t be applied to a new technology, explain why such actions would result in chaos and provides a clear plan for the SEC to fulfill its obligations to protect investors by working with the leaders of the new technology. Which is not unlike what the government has done with every new technology from steam engine trains, to cars, airplanes, and more recently the internet.
• But instead the SEC did something completely different. Some would say that the SEC took advantage of the impossible task of applying 90 year old rules to an emerging technology, coupled with a refusal to provide clarity when asked and they used all information provided by industry participants in inquiries to prosecute them. This created a chilling effect where the industry didn’t communicate with the SEC, the investors were not protected by the SEC, bad elements in the industry stole billions of dollars from investors, while the SEC blamed the investors for investing in the emerging technology.
• The SEC has been engaging in a form of Anti-guidance where they provide no guidance to industry participants, use any information provided by participants to the SEC to prosecute them, and additionally and effectively prosecute people for laws which didn’t exist until the SEC creates them to charge them with the crime of violating them. This behavior, termed Regulation by Enforcement is a form of legal entrapment, which has been used along with other tactics to destroy industry participants in the US and force them to leave the country.
• Now that the Hinman documents have been released, the judges, the lawyers, and the cryptocurrency industry participants can connect the dots and figure out what the SEC was doing.
• This information, combined with the recent history of an organized attack on banks supporting the industry, the documented attempts by both Coinbase and Binance to engage with the SEC to conduct lawful cryptocurrency businesses in the USA, and the legal attacks by the SEC against them. This paints a clear picture of a virtual war waged by the SEC against this emerging industry. This is being laid bare for all to see. I think this will result in the end of the SEC as we know it. And the current proposed law in the US Congress to completely reorganize the SEC suggests that I am not alone in connecting these dots and coming to this conclusion.