John Deaton Criticizes SEC's Approach to Crypto Regulation

Deaton on SEC and Crypto Regulation

John Deaton, founder of Crypto-Law.US, has voiced criticism against the SEC's handling of cryptocurrency regulations. He emphasized the need for a clearer regulatory framework, especially concerning the identification of major token holders and the transparency required for a stable crypto environment.

Ripple's Transparency and SEC's Response

Deaton argues that the SEC has exploited Ripple's commitment to transparency. Ripple Labs implemented cryptographic escrow and regularly published reports on XRP sales, yet the SEC allegedly used this openness to target Ripple and its CEO, Brad Garlinghouse. Deaton referenced a 2018 speech by Hinman, former SEC official, about crypto assets and securities classification, highlighting inconsistencies in the SEC's approach.

Ethereum and Regulatory Implications

The SEC's stance on Ethereum also plays a critical role in its case against Ripple. Although Bitcoin and Ethereum were previously declared commodities in 2018, preventing SEC scrutiny, recent statements by SEC Chairman Gary Gensler suggest Ethereum could be considered a security. Gensler posits that most cryptocurrencies, except Bitcoin, were developed and promoted by groups, thus qualifying them as digital securities.

The Need for a Sane Regulatory Environment

Deaton advocates for a rational regulatory framework that clarifies token ownership and ensures fair treatment across the crypto industry. Without such regulations, the SEC's selective enforcement may hinder innovation and transparency within the cryptocurrency landscape.