Ripple Vs SEC: Prominent Lawyer Deaton Criticizes SEC, Accusing Agency of Losing Its Direction

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Prominent cryptocurrency attorney  john e deaton john e deaton founder at Crypto Law US john EntrepreneurHostMarket Analyst has sparked an online storm with pointed criticism aimed at the U.S. Securities and Exchange Commission (SEC). As an ardent supporter of Ripple and its digital currency, XRP, Deaton did not mince his words when expressing his frustration with the regulatory body and its leadership.

Deaton Challenges the SEC’s Stance

John Deaton has castigated the SEC, accusing it of losing sight of its purpose and assigning blame specifically to its chairman, gary gensler gary gensler chairman at US Securities and Exchange Commision Gary Gensler is an enthusiastic leader and the current chair of the U.S. Securities and Exchange Commission (SEC). He has the extreme experience that spans wall street, government regulation, and an angel teaching about cryptocurrencies and blockchain at MIT. He announced several initiatives to enhance investor protections in the $2 trillion cryptocurrency market. He previously led the Biden-Harris transition’s federal reserve, Banking, and securities regulation agency review team.    He was awarded Treasury's highest honor, the Alexander Hamilton Award, and also was a recipient of the 2014 Frankel Fiduciary Prize. He was born on October 18, 1957, into a Jewish family, in Baltimore, Maryland. Graduated from the University of Pennsylvania, earning a Master's degree in Business Administration. Additionally, he is also a professor at the MIT Sloan School of management. He has served in various governmental roles since the 1990s, such as the treasury department, Sarbanes-Oxley, CFTC, Swaps, Enforcement, Libor investigation, Maryland Financial Consumer Protection Commission, Securities, and Exchange Commission.    Gary Gensler will probably keep on filling in as seat of the SEC until 2026, accepting his renunciation. He has expressed his desires to present crypto-related approach changes later on that include token commitments, decentralized finance, stablecoins, guardianship, exchange-traded resources, and advancing stages. A few officials as well as his kindred SEC magistrates have scrutinized Gensler for not giving adequate administrative direction on crypto, possibly prompting a standoff between Congress and the association.    The SEC, CFTC, and Financial Crimes Enforcement Network handle advanced resource guidelines in the U.S., however, each with various jurisdictional cases, bringing about an interwoven methodology that crypto firms should explore to work legitimately. Whether 2022 will see a more clear way for organizations in the crypto space is questionable, yet the cosmetics of the SEC's initiative will fundamentally change following the takeoff of chief Elad Roisman in the first month of the year. Chief Allison Lee's term is likewise set to terminate in June 2022. Chairman . Deaton called Gensler a “bad faith regulator” and affirmed that the SEC’s unclear approach to cryptocurrency regulation has not hindered the sector’s growth.

The SEC’s Preference for Ambiguity

Citing the viewpoint of Commissioner Hester Peirce, who proposed a Safe Harbor initiative for Initial Coin Offerings (ICOs) back in 2018, Deaton argued that the SEC institutionally prefers an unclear regulatory landscape. Emails relating to the speech by former SEC official William Hinman were mentioned as evidence of this preference for ambiguity.

Deaton’s allegations also revolved around the claim that the SEC’s general counsel advised against providing regulatory clarity to Ethereum (ETH), not due to concerns over decentralization but to keep future regulatory options for ETH open.

Also Read: Crypto Vs SEC: Legal Expert Claims SEC May Be Violating the Law in Cryptocurrency Regulation

Ripple and the SEC: Ongoing Contention

While Ripple’s ongoing legal tussle with the SEC remains unresolved, Ripple continues to find support within the crypto community. Lawyer Bill Morgan, for instance, questioned the SEC’s failure to seek an injunction against Ripple’s operations. 

If Ripple were truly engaging in harmful or illegal activities, as the SEC alleges, wouldn’t it have been prudent for the regulator to halt such actions for the investors’ protection?

In his concluding query, Morgan further posed, “Shouldn’t the SEC have at least tried to file for this for the ‘protection’ of investors?” This open-ended question left more lingering doubts about the SEC’s objectives and strategies, reflecting the ongoing controversy surrounding this regulator’s interaction with the burgeoning cryptocurrency industry.