Deaton Slams a16z General Counsel For Wrongly Asserting Ripple Should Be Decentralized

Deaton goes up against a16z general counsel Miles Jennings.

In a tweet on Tuesday, Attorney John Deaton, popular for his role as amicus curiae in the case between the US Securities and Exchange Commission and Ripple, blasted Andressen Horowitz (a16z) crypto’s general counsel, Miles Jennings, for making assertions that Ripple ought to be decentralized.

Deaton clarified that Ripple is a company with a CEO and a directing board and, as such, is, by design, centralized. Not to be confused with the XRP Ledger, a decentralized blockchain built by Ripple with the native XRP token.

Notably, the amicus curiae throwing more shade at the a16z GC questioned if the lawyer’s opinions are being influenced by Bill Hinman, AKA William Hinman, whose speech in 2018 has been at the center of the Ripple case. Hinman, at the time a director at the SEC, had asserted that Bitcoin and Ethereum were not securities.

It is worth noting that Hinman now holds an advisory role at a16z.

Notably, the tweet from Jennings implied that the blowups and legal battles in the case of Ripple and LBRY were down to a lack of decentralization. However, the arguments from a16z counsel are problematic as nearly all blockchains are built by single entities with centralized structures.

Should someone inform the GC of @a16z that @Ripple and @LBRYcom are companies with a CEO and a Board of Directors and thus, by definition, are centralized entities? But then again, he may have learned about “sufficient decentralization” from his partner Bill Hinman. https://t.co/L1vFCYjj4Y

— John E Deaton (220K Followers Beware Imposters) (@JohnEDeaton1) November 8, 2022

Consequently, only the blockchains ought to be decentralized. And in the case of Ripple and LBRY, it is not clear how the tokens used on these blockchains are automatically securities because these firms are centralized.

LBRY, notably, also responded to Jennings, clarifying that the SEC never alleged that the network was centralized and admitted that they could not shut LBRY down. However, it says that the SEC claims that “if a centralized entity deals in a token of a decentralized network, those token exchanges are securities offerings.”

More so, CryptoLaw, a crypto regulation YouTube news channel, pointed out that the actions of Ripple and LBRY were no different from those of Consensys, where Jennings previously worked. Notably, Consensys has launched several Initial Coin Offerings (ICOs) to raise funds for projects. For example, Gnosis was launched with a public ICO in April 2017.

It is worth noting that Ripple remains locked in a nearly two-year-long legal battle with the SEC, as the latter claims XRP is an unregistered security. However, Ripple received a boost in October after the SEC finally handed over the documents related to the drafting of the controversial Hinman speech, with Ripple chief Brad Garlinghouse and attorney Stuart Alderoty expressing confidence. 

However, the loss by LBRY at the hands of the SEC has raised concerns among the XRP faithful. While Attorneys like Deaton and Jeremy Hogan have tried to point out differences, Jennings, who also worked on the Crypto Council for Innovation (CCI) amicus brief in support of Ripple, says he does not have his hopes up. 

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