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

Prominent cryptocurrency attorney John Deaton 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. 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.

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.