Prominent pro-crypto lawyer and legal representative of XRP holders John Deaton has voiced strong concerns about the functionality and integrity of the U.S. Securities and Exchange Commission (SEC). Deaton took to Twitter to express his belief that the commission, as an institution, is indefensible and a broken agency that no longer upholds its core mission.
Deaton’s criticism primarily stems from what he perceives as the SEC’s mishandling of the cryptocurrency market. He lamented the agency’s reliance on outdated cases from decades ago in its briefs, suggesting that this approach fails to provide sufficient guidance and clarity to the evolving market. Furthermore, Deaton pointed out significant events that should have influenced the SEC’s perspective on digital assets.
He referred to the agency’s 2018 public speech by William Hinman, which outlined the SEC’s stance on cryptocurrencies. In 2019, the regulator issued a framework for “investment contracts,” stating that a virtual currency used for payments and as a fiat substitute was unlikely to be classified as a security under the Howey test.
Deaton highlighted that XRP had already been recognized as a virtual currency by multiple governmental bodies, and former SEC chairman Clayton had supported Hinman’s viewpoint. According to Deaton, these factors raise doubts about the regulator’s recent actions regarding XRP.
Given the SEC’s crucial role in regulating the rapidly expanding crypto industry, Deaton’s critique underscores the need to evaluate the agency’s practices and policies comprehensively.
It is essential to ensure that they align with the dynamic nature of the digital asset landscape. Calls for reform are growing louder, and the debate over the SEC’s efficacy and its impact on the crypto market is expected to intensify in the coming months.
The cryptocurrency market has undergone significant growth and evolution in recent years, necessitating a regulatory framework that can adapt to its complexities. As the SEC plays a vital role in shaping the industry, stakeholders and participants increasingly call for re-evaluating the agency’s approach to cryptocurrencies and digital assets.
In response to Deaton’s criticism, the SEC may face mounting pressure to review and update its regulatory guidelines to provide clearer guidance to market participants. The evolving nature of the crypto market requires regulators to strike a balance between investor protection and fostering innovation.
As the debate unfolds, how the SEC will respond to the growing calls for reform remains to be seen. The agency’s actions and policies in the coming months will be closely watched as the crypto industry shapes the global financial landscape.
