Pro-XRP Lawyer John Deaton Advocates for End to SEC’s “Crypto Wars”

Pro-XRP attorney John E. Deaton has called on U.S. regulators to end the ongoing “crypto wars” spearheaded by the Securities and Exchange Commission (SEC).

These prolonged legal battles, which target prominent crypto firms like Ripple Labs, LBRY, and Coinbase, have imposed significant financial and operational burdens on the industry, raising concerns about stifled innovation and lost opportunities.

Ripple and SEC: A Costly Clash

Ripple Labs, the entity behind XRP, has spent over $150 million defending itself against the SEC’s allegations that its sale of XRP constitutes an unregistered securities offering. Ripple has vehemently denied these claims, arguing that XRP is not a security but a digital asset similar to Bitcoin or Ethereum. While Ripple secured some key legal victories, the case has disrupted its operations, partnerships, and market dynamics, with XRP being delisted from major U.S. exchanges.

The pro-XRP lawyer urges the SEC to end its “crypto wars” to promote innovation and clarity in the industry. Source: John E Deaton via X

Deaton, who represents over 75,000 XRP holders, underscored the impact of these legal proceedings:

“Ripple’s executives faced intimidation tactics, while XRP holders suffered billions in losses due to market uncertainty and delistings.”

The Fallout: LBRY and Kraken

Deaton also cited the case of LBRY, a blockchain-based content platform that the SEC targeted without fraud allegations. The regulatory action led to the platform’s shutdown, job losses, and significant financial hardship for its founder, Jeremy Kauffman. “No fraud was committed or even alleged. Yet, the community and ecosystem that LBRY built were completely dismantled,” Deaton noted.

Similarly, Kraken, after paying a $30 million fine to settle one SEC case, faced further regulatory scrutiny, reflecting a pattern of what Deaton described as excessive enforcement.

A Call for Balanced Regulation

Deaton’s criticism highlights the broader frustration within the crypto community over the SEC’s approach to regulation under outgoing Chair Gary Gensler. Advocating for dismissing non-fraud cases, Deaton stressed the need for a regulatory framework that fosters innovation while protecting investors. He argued that the current approach has discouraged growth, pushed companies abroad, and created an uncertain environment for crypto projects. “A more balanced and transparent approach is essential to support innovation and prevent further harm to the industry,” Deaton said.

A fair and transparent regulatory approach is vital to foster innovation and mitigate harm in the crypto industry. Source: F via X

With the upcoming leadership transition at the SEC and the inauguration of Donald Trump, the crypto community is hopeful for policy changes. Trump’s nomination of Paul Atkins, known for favoring less restrictive regulations, as the next SEC chair, signals a potential shift toward clarity and innovation-friendly policies.

Ripple’s Symbolic Role

The Ripple case has been the main event in the wider contentious regulatory argument over cryptocurrency and digital assets. A favorable resolution for Ripple could unlock the door to clearer rules, ushering in the much-needed clarity on regulations that would give a boost to market confidence, as well as attract investment.

Ripple’s XRP price has recently exceeded the $3 milestone. Source: XRP Liquid Index (XRPLX) via Brave New Coin

Deaton and other advocates argue the resolution of these disputes would be important for rebuilding trust in the crypto industry, treating digital asset companies fairly, and allowing the U.S. to lead in blockchain technology. The spinoff might also serve to tell international markets that the U.S. is open to fostering innovation with the protection of investors.

What’s Next for Crypto Regulation?

The crypto community eagerly awaits clearer guidelines under the new SEC leadership. Industry stakeholders argue that regulatory clarity could stabilize the market, attract investment, and solidify the U.S.’s role in blockchain innovation.

The resolution of these cases could set a transformative precedent for the crypto industry, potentially heralding a more supportive regulatory environment and fostering sustainable growth. As Deaton said, “Ending the crypto wars will allow us to focus on building and seizing opportunities rather than wasting resources on endless legal battles.”