SEC must conduct ‘reasonable’ record searches in crypto conflict of interest case

A judge found the SEC did not search for all relevant documents in Empower Oversight’s lawsuit on potential SEC conflicts of interests

article-image

Kristi Blokhin/Shutterstock modified by Blockworks

share

A Virginia Judge overseeing Empower Oversight’s 2021 case against the SEC sided with a 2022 motion from the regulatory agency — with a few caveats.

Judge Rossie D. Alston Jr. said government agencies must conduct a “reasonable search for responsive records” in FOIA requests.

In a few of Empower’s requests, the court found that the SEC’s “searches were not ‘reasonably calculated to uncover all relevant documents.”

The documents requested by Empower are related to communications between Marc Berger, Jay Clayton and William Hinman while they were at the SEC.

Marc Berger was acting enforcement director at the SEC until 2021, bringing the SEC’s complaint against Ripple to light in 2020. 

Jay Clayton led the SEC until 2020, then proceeded to sign on with One River Asset Management’s advisory council. 

Clayton told Blockworks last year he didn’t expect to be involved with firms in the cryptocurrency space after he left the SEC.

William Hinman — who is at the center of the Hinman speech documents that Ripple requested in its court battle with the SEC — left the regulatory agency in 2020 and joined Simpson Thacher & Bartlett as a senior adviser. 

The SEC claimed that it complied with Empower’s FOIA requests for documents relating to SEC personnel’s communications with Enterprise Ethereum, One River Asset Management and Simpson Thacher and Bartlett. The watchdog specifically requested documents from May 2017 through December 2020.

The SEC did not, however, fully provide all of Empower’s requests with a “reasonable search” the court ruled, despite the judge deciding that the regulatory agency’s motion for summary judgment was granted in part.

“Defendant has offered no explanation why it confined its search to only a part of Plaintiff’s request, which indicates that the search was not conducted ‘in a manner reasonably certain to uncover all responsive records,” said a memorandum opinion filed on Wednesday.

“To be sure, agencies need not conduct backbreaking inquiries to find every possible responsive document. A search must be ‘reasonably calculated to uncover all relevant documents,’” the filing states.

The judge also ruled that both the SEC and Empower must provide the court with a status update on July 19.

This is not Empower’s only case against the SEC in regard to FOIA requests. In May, Empower filed another complaint — this time in a DC court — requesting documents from the agency in regards to the XRP lawsuit and Hinman documents.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Unlocked Advisory (2).png

Research

Sei recently announced Sei Giga, a full re-architecture of its Layer-1, designed to deliver 200k TPS and sub-400ms finality. With multi-proposer consensus, parallel execution, and a revamped storage engine, Sei Giga can position the it as the fastest EVM-compatible chain to date. This report breaks down the architecture, compares it to other high-performance chains, and models its potential ecosystem impact.

by Loso

/

article-image

Pump.fun’s own token is coming soon, sources tell Blockworks

article-image

“Retail may find it harder to latch on” to a company with less brand recognition than Coinbase, VanEck crypto research head says

article-image

A Magic Eden spokesperson confirmed that the team worked with the $TRUMP team on the wallet, which they expect to launch “soon”

article-image

Berabaddies launches a community yield vault on Berachain to make DeFi accessible

article-image

The Ethereum Foundation’s newly-formed Protocol division — leaner, led by EF veterans — sets the stage for the chain’s next major hard fork

article-image

The gap between cryptography breakthroughs is shortening