Crypto lawyer and XRP supporter John Deaton says that the U.S. Securities and Exchange Commission (SEC) is moving in the wrong regulatory direction at the expense of retail investors.
Deaton tells his 263,500 Twitter followers that SEC officials have had more than enough time to create greater regulatory clarity around cryptocurrencies.
He highlights how years ago former SEC officials made statements making it seem that XRP and similar digital assets would not be considered securities. But that question now remains the subject of debate and litigation.
“Also in 2019, former [SEC] Chairman [Jay] Clayton publicly agreed with Hinman’s speech stating the token itself is NOT a security and that a token can, at first, start out or be issued as a security, but later transform so that subsequent sales of the token no longer meet the Howey test.
Yet, here we are FOUR years later, moving backward regarding regulatory clarity. And for you crypto Critics that say Hinman and Clayton’s comments are immaterial because their statements were only personal opinions, I say hogwash (I actually say something else but I’m being polite).”
In the now famous 2018 speech Hinman, then an SEC official, said he believes both Bitcoin (BTC) and Ethereum (ETH) are not securities.
Deaton also says the lack of U.S. regulatory clarity, such as when SEC chair Gary Gensler wouldn’t answer if his agency considered ETH a security, is creating market instability and therefore harming retail investors, despite the SEC’s stated mission.
“But one thing you CANNOT credibly argue, is that the SEC is even remotely protecting investors. Not only has it failed miserably to protect investors, it certainly hasn’t maintained ‘fair, orderly, and efficient markets’ nor ‘facilitated capital formation.’
In 2020, the SEC sued Ripple Labs, the issuer of payment token XRP, alleging they illegally sold unregistered securities. The lawsuit is pending, but Ripple expects a summary judgment this year.
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