Bill Morgan, a prominent attorney supporting XRP, has once again voiced serious accusations against the Securities and Exchange Commission (SEC), claiming the agency has demonstrated biased regulatory practices favoring Ethereum over XRP. This renewed allegation feeds into a larger controversy known as "ETH Gate," which has recently drawn the attention of the Conservative Political Action Conference (CPAC).

Morgan's critical remarks appeared on social media platform X, where he used sarcasm to underscore his frustration: “But it is all just a grand conspiracy of the XRP community. It is a good summary and that is without even taking into account that the SEC started investigating Ripple, at a time when XRP was number three in market cap behind Ethereum, in April 2018 while the draft of the Hinman speech was being worked on by dozens of SEC staff and attorneys. How corrupt can a regulator be.”

These comments arrive in the wake of increasing scrutiny over the conduct of former SEC official William Hinman. The CPAC Foundation, through its Center for Regulatory Freedom, has taken decisive action by filing formal complaints with the New York and California Bar Associations. These complaints allege unethical behavior and potential conflicts of interest during Hinman’s tenure at the SEC.

The crux of the allegations revolves around a pivotal 2018 speech by Hinman, where he stated that Ethereum should not be classified as a security. This statement has had significant repercussions for the cryptocurrency industry, shaping regulatory perspectives and market dynamics.

Andrew Langer, Director of CPAC Foundation’s Center for Regulatory Freedom, articulated the gravity of the situation in the complaint: “Mr. Hinman’s affiliations and actions while serving in a high-ranking SEC role raise serious ethical questions that warrant thorough investigation by the respective Bar Associations.”

Central to the controversy is Hinman’s professional history. Prior to his SEC appointment in May 2017 as Director of the Division of Corporation Finance, Hinman was a partner at Simpson Thacher & Bartlett (STB), a law firm deeply embedded in the financial services and blockchain sectors. Just a year later, Hinman's June 2018 speech distinguishing Ethereum from securities seemingly relieved it from the regulatory burdens typically associated with securities transactions.

This speech's timing is particularly contentious because Simpson Thacher was involved with the Enterprise Ethereum Alliance (EEA), a consortium dedicated to advancing Ethereum's application in various industries. CPAC's complaint underscores the potential conflict of interest, noting that Hinman’s former firm could benefit significantly from Ethereum’s favorable regulatory status.

The CPAC's complaint draws heavily on a trove of internal SEC emails and external communications, which reveal interactions with Ethereum co-founder Vitalik Buterin preceding Hinman’s 2018 speech. These documents, unearthed during the extensive discovery process in the ongoing SEC lawsuit against Ripple Labs, suggest a disparate regulatory approach. Ripple’s XRP token, classified as a security by the SEC in a late 2020 lawsuit, allegedly faced stricter regulatory scrutiny than Ethereum—a disparity that critics like Bill Morgan argue points to regulatory favoritism.

This developing story continues to unfold as the CPAC's formal complaints add pressure on regulatory bodies to address these serious ethical and procedural concerns.