Prominent Ripple and XRP advocate and legal expert John E. Deaton has accused the United States Securities and Exchange Commission (SEC) of its failure to provide regulatory clarity for the cryptocurrency industry, emphasizing that the American regulatory agency has “lost its way.”
The more-than-two-year-long battle between Ripple and the SEC continues to drag as crypto enthusiasts and the XRP community carry on waiting with bated breath. Over the course of time, there have been numerous heated exchanges including many Twitter spats between pro XRP users and the SEC.
However, these arguments seem to have taken an ugly turn in the recent past with leading industry figures and digital asset enthusiasts chiming in to lambast the American watchdog.
Deaton Slams SEC Over Lack of Clarity
On July 4, Deaton the XRP advocate, took to Twitter to slam the SEC and its chairman Gary Gensler. In a series of tweets, the lawyer asserted that Gensler who bears most of the blame, was not the only one to point fingers at, arguing that “the SEC, as an agency, has lost its way,”
He belted out his frustration for the regulator’s failure at providing clear crypto regulations and its aggressive actions against digital currency firms.
As bad as @GaryGensler is (he’s a bad faith regulator – hard 🛑), and as much blame he deserves (he deserves most of it), he is not the only one deserving of criticism. The SEC, as an agency, has lost its way. Mark is correct, Crypto is one more technology that will succeed or… https://t.co/QwyUXgDbC1
— John E Deaton (@JohnEDeaton1) July 4, 2023
The discussion began after American businessman Mark Cuban said no U.S. investors would have lost money in the FTX rout if the SEC had set clear regulations like Japan did. Unlike a few countries, the U.S. is yet to come up with a comprehensive framework or set of regulations that allow cryptocurrency and blockchain firms to operate without fear of being targeted by regulators.
Deaton argued the SEC’s very resistance to the Hinman emails offering more details on the issue of crypto assets indicates the regulatory agency prefers to retain a lack of clarity and vague law for the sole purpose of insulating itself and keeping its options open in the future.
In addition, the attorney also criticized the SEC chair, highlighting that Gensler is a bad faith regulator who deserves most of the blame he has received recently. As per the Twitter thread, Deaton agreed with Cuban’s views, saying that crypto will either fail or succeed on its own. He noted that the market will decide whether crypto will succeed or fail. The pro XRP lawyer wrote,
“The SEC, as an agency, has lost its way. Mark is correct, Crypto is one more technology that will succeed or fail on its own. It is here to stay in some form or another, but the market will decide – as it always does.”
Now think of @mcuban’s tweet about Japan and how FTX Japan customers lost nothing. Let’s compare that to @CelsiusNetwork, Genesis, @BlockFi, @FTX_Official etc.
— John E Deaton (@JohnEDeaton1) July 4, 2023
Industry Leaders Continue to Blast SEC
This comes hot on the heels after Stuart Alderoty, the chief legal counsel at Ripple, lashed out at the SEC along with Gensler, citing the chairman’s recent comments that every digital asset is a security should have “legal consequences” and the “agency should be held accountable” for its anti-crypto stance.
This is a must read from the @BlockchainAssn. Chair Gensler's statements have legal consequences and the Commission should be held to account. https://t.co/LMDuk6YP8S
— Stuart Alderoty (@s_alderoty) June 29, 2023
Recently, Blockchain Association Policy Lead Jake Chervinsky also denounced Gensler hinting that the SEC chair should remove himself from enforcing rules on the crypto sector, arguing his public comments have made clear that he doesn’t have an impartial approach to the issues.
In a detailed blog post, Chervinsky explained that despite continued requests from the digital assets industry for regulatory clarity, the SEC has refused to adopt any rules or issue any guidance, among many others, for over four years. Instead, the SEC has chosen to regulate digital assets solely through enforcement actions.
US Risks Falling Behind
The American watchdog’s fervent regulatory tightening has sparked a wave of criticism from digital assets firms and advocates for what they describe as regulatory overreach. Over the past few months, several leading industry figures and prominent lawmakers have echoed in along the same tune, slamming the SEC and Gensler.
Earlier this year, when asked by CNBC if the U.S. is at risk of falling behind other jurisdictions in the crypto economy, Monica Long, president of Ripple, asserted, “We think so.”
