Renowned pro-XRP lawyer John Deaton recently voiced his concerns about the seemingly hostile approach of the SEC toward the burgeoning cryptocurrency industry. He argues that the SEC’s actions, ostensibly designed to protect investors, mask a deeper agenda of preserving the status quo of corporate capitalism.
The Alleged Assault on Cryptocurrencies
Deaton critiques the SEC’s interventions in the cryptocurrency sphere. He examines their seemingly disproportionate focus on companies like Coinbase and Ripple, two significant entities within the crypto ecosystem. By analyzing factors such as accredited investor rules and the SEC’s regulatory approach towards cryptocurrencies, Deaton throws light on the apparent biases and inconsistencies in the SEC’s handling of the Ripple case and the larger crypto industry.
In his public statements on Twitter, Deaton posits that the U.S. operates within a framework of corporate capitalism rather than a genuinely free market capitalist system. He draws on various elements of the current financial environment to fortify his argument, challenging the conventional understanding of capitalism in the U.S.
Misplaced Priorities of the SEC
The legal luminary further criticizes the SEC’s use of its limited resources to prioritize Section 5 cases and concentrate on the secondary market on exchanges rather than tackling the genuine cases of fraud rampant in the cryptocurrency sector. According to Deaton, such a misguided approach stifles innovation and could also brake on the growth of the promising cryptocurrency industry.
A significant concern for Deaton is the SEC’s apparent reluctance to involve retail investors as amici curiae in the Ripple case. He sees this as indicative of a disregard for the perspectives of retail investors. This stance cements the perception that the SEC may favor the interests of larger financial institutions over those of individual investors.
The Double Standards in Crypto Regulation
Deaton’s observations extend to the SEC’s seeming double standards when engaging with proactive entities within the crypto industry. He blames the SEC for not initiating dialogue with forward-thinking entities like Coinbase. At the same time, the SEC Chair, Gary Gensler, held several meetings with Sam Bankman-Fried, the former CEO of the now-defunct FTX exchange.
This apparent unequal treatment stokes fears about the impartiality and effectiveness of the regulatory body and calls into question the overarching framework for digital assets. Deaton suggests that the SEC’s inconsistent approach to different industry players could hinder innovative start-ups’ growth while favoring more established entities.
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