Lawyers Want Large Token Holders To Identify Themselves as in 13D-style

Gabriel Shapiro advocates for ownership disclosure for large token holders.
Pro-XRP lawyer John Deaton agrees with the idea.
Deaton praises Ripple’s implementation of cryptographic escrow and transparent XRP reports.

In a recent tweet, Gabriel Shapiro, General Counsel at Delphi Labs, expressed support for a particular aspect of Know Your Customer (KYC) procedures in the crypto industry targeted at whales and large crypto holders.

Shapiro agreed that significant token holders should be required to disclose their identities and the percentage of the total supply they directly or indirectly possess or control. Drawing a parallel, he referred to this concept as “13D-style,” alluding to a similar mechanism used in traditional financial markets.

one of the few crypto KYC-ish things I agree with is the idea that very large token holders should have to identify themselves and what % of total supply they directly/indirectly own/control, like 13D-style
otherwise difficult to truly assess system security/centralization…
— _gabrielShapir0 (@lex_node) July 9, 2023

Shapiro’s tweet highlighted the challenges inherent in evaluating system security and centralization without comprehensive information about large token holders. The lawyer sought to address these concerns by advocating for transparent identification and ownership disclosure.

John Deaton, a prominent pro-XRP lawyer, responded to Shapiro’s tweet, expressing 100% agreement provided the U.S. has attained regulatory clarity. He cited an example from the San Francisco-based blockchain technology firm Ripple.

Deaton lauded Brad Garlinghouse, the CEO of Ripple, and Ripple itself for implementing cryptographic escrow and regularly publishing XRP reports that provide detailed insights into XRP sales.

However, Deaton lamented that the U.S. Securities and Exchange Commission (SEC) had used Ripple and its executives for these transparent practices in the ongoing legal battle.

Once we’re in a sane regulatory environment, I 💯 agree. @bgarlinghouse & @Ripple implemented the cryptographic escrow and started publishing #XRP Reports every quarter, identifying #XRP sales. The SEC, however, used all of this “transparency” against Garlinghouse and Ripple.… https://t.co/NHQyMISMB0
— John E Deaton (@JohnEDeaton1) July 9, 2023

The SEC accused Ripple of conducting an unregistered securities offering through the sale of XRP, leading to a heated legal confrontation between the two parties. Deaton drew attention to a question asked of William Hinman, a former SEC official, during the legal proceedings.

The lawyer said Hinman was asked if the SEC had investigated the token ownership of Joseph Lubin, co-founder of Ethereum, and other Ethereum luminaries such as Vitalik Buterin and Consensys at the time of his speech.

According to Deaton, Hinman testified that the SEC had uncovered the information during its due diligence process when evaluating Ethereum without recalling the specific numbers or percentages regarding token ownership.

Source: https://coinedition.com/lawyers-want-large-token-holders-to-identify-themselves-as-in-13d-style/