XRP Pro Lawyer Disagrees With Saylor That All Crypto Assets Other Than Bitcoin Are Securities

Attorney Deaton says Saylor’s claim is mistaken.

Pro-XRP attorney John Deaton has rebuffed comments made by MicroStrategy co-founder Michael Saylor, claiming that crypto assets other than Bitcoin are securities destined to be regulated by the Securities and Exchange Commission (SEC).

In a February 23 New York Magazine interview, SEC chairman Gary Gensler claimed that “everything other than Bitcoin” falls under the agency’s regulatory purview. Gensler’s assertions sparked a mixed reaction from cryptocurrency community members, with most Bitcoin maxis like Saylor applauding the SEC chairman for the comment. 

In a February 26 tweet, Saylor said Gensler’s comment confirms that consensus is building that everything other than Bitcoin is a security and needs to be regulated by the SEC. He added that the development makes Bitcoin the only cryptocurrency suitable to be used as a global currency.

Consensus is building that everything in the #Crypto industry other than #Bitcoin is a security, destined to be regulated by the @SECGov. This makes $BTC the only crypto-asset suitable for use as global money.https://t.co/4XK6wWbz7G

— Michael Saylor⚡️ (@saylor) February 26, 2023

Attorney Deaton Says It’s False

Saylor’s statement did not sit well with attorney Deaton, who disagreed with the Bitcoin maxi in a tweet today. Aside from Bitcoin Maxis and Gensler, attorney Deaton said there is no consensus in the crypto industry that everything other than BTC is security.

Not true. Outside of @GaryGensler’s 🧠 and #BTC Maxis, there’s no consensus everything other than #Bitcoin is a security. There certainly isn’t a consensus w/in the legal community. Software code is NOT a security. It, like any other asset, can be offered and sold as a security. https://t.co/MokmwLr7Ok

— John E Deaton (@JohnEDeaton1) February 27, 2023

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Deaton asserted that there is also no consensus within the legal community. The lawyer representing XRP community members in the Ripple v. SEC lawsuit said a software code could not be classed as a security. However, attorney Deaton added that the software code transformed into crypto could become a security like every other asset via the way it was sold.

According to attorney Deaton, Saylor knows his initial statement is false and is only issued to “push a narrative that drives out of altcoins and into Bitcoin.” 

The CryptoLaw founder said he could not blame Saylor for the comment, given MicroStrategy’s exposure in Bitcoin. It is noteworthy that MicroStrategy is one of the publicly-traded companies with significant Bitcoin holdings. In its Q4 2022 report, MicroStrategy announced that it increased its Bitcoin holdings to a whopping 132,500. 

Other U.S. Lawyers Disagree With Gensler

Meanwhile, attorney Deaton is not the only U.S. lawyer who has rebuffed the comments made by Gensler. 

Yesterday, Jake Chervinsky, a lawyer and Policy Lead at Blockchain Association, tweeted that Gensler’s recent assertion is not the law. He added that the SEC could not regulate the entire crypto asset market until it proves its court case. 

Chair Gensler may have prejudged that every digital asset aside from bitcoin is a security, but his opinion is not the law. The SEC lacks authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time.

— Jake Chervinsky (@jchervinsky) February 26, 2023

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