CryptoLaw’s Founder John Deaton, attacked the SEC’s overreach in an opinion piece published on Fox Business. Gary Gensler, the head of the Securities and Exchange Commission, remains adamant to push for the expansion of the agency’s legal jurisdiction, according to Deaton.
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The SEC harms investors and creates disorderly markets by not providing regulatory clarity.https://t.co/vdra1tJjoB
— Moonchaser (@Moonchaser2020) August 21, 2022
He emphasized how, except congressional action, the major regulator of investments that are not classified as traditional securities, the Commodity Futures Trading Commission (CFTC), has primary responsibility for overseeing digital assets. This would suggest that the SEC only has limited authority over the bitcoin sector. The Supreme Court established a four-part criteria for determining what constitutes an investment contract in its well-known Howey Criteria ruling s published in 1946. Deaton added that Congress has failed to pass any new legislation that would directly regulate cryptocurrencies since Howey. This should signal that Congress wants for the CFTC to act as the industry’s de facto regulator.
He asserts that Gary Gensler, the SEC head, has launched a campaign of regulation by enforcement that has pushed Howey to the limit by taking advantage of this allegedly unclear situation.
On his final day as SEC Chairman in December 2020, Jay Clayton filed the Ripple complaint. Because the revenues were reportedly used, in part, to assist Ripple’s business expansion, the SEC brought charges against Ripple officials for allegedly selling XRP in a way that would have made it a security under Howey. They had to “disclose” information about such sales to investors as a result, just like a public company would. As a result of the SEC’s lawsuit against it, XRP is by far the most significant altcoin in the cryptocurrency market, according to tweets from John Deaton.
He made the point that if Ripple Labs loses, it would be risky for all other cryptocurrencies because they might be classified as “unregistered securities” by the SEC.
Source: https://www.thecoinrepublic.com/2022/08/23/cryptolaw-founder-john-deaton-says-everything-is-at-stake-on-ripple-sec-lawsuit/