Deaton’s remarks come after a former SEC employee suggested that BTC could be an unregistered security.
Attorney John Deaton has warned that the U.S. SEC could quickly turn on Bitcoin (BTC) and label the asset as security. Deaton’s comments come after a former SEC enforcement officer recently suggested that BTC is a security that requires SEC registration.
Ethereum maximalist Evan highlighted last week that most BTC block production is controlled by two entities: FoundryUSA and Antpool. This brought up fresh centralization concerns. Commenting on the disclosure, former SEC enforcement attorney John Reed Stark asked why BTC is not regarded as a security that requires SEC registration.
Deaton responded to the comment, revealing that other officials within the SEC also believe BTC is an unregistered security. He pointed out that some SEC employees had already argued that BTC was a security in 2015, and the claims could resurface. Deaton has also raised similar concerns regarding ETH in the past, noting that the SEC could also label the asset a security following its switch to PoS.
There are others at the SEC who believe the same thing. In 2015, some at the SEC argued BTC was an unregistered security. This is why it’s absurd for Maxi’s like @saylor and @maxkeiser to encourage/celebrate the SEC’s actions 🆚 XRP and other tokens. SEC overreach is bad for USA. https://t.co/6oQgy2SVGZ
— John E Deaton (@JohnEDeaton1) December 29, 2022
The Need for Solidarity
Deaton’s comments come amidst the lack of support Ripple is getting from Bitcoin maximalists and some Ethereum proponents. Bitcoiners like Michael Saylor and Max Keiser have repeatedly backed the SEC in the legal battle against Ripple. On December 5, Saylor claimed Ethereum and Ripple are committing “securities fraud” and should be shut down, asserting that ETH and XRP are unregistered securities.
Additionally, Ethereum founder Buterin recently claimed XRP is centralized. In August, he said XRP lost its right to get protection from Ethereum supporters after Ripple claimed Ethereum was China-controlled in a court filing two years ago. It bears mentioning that SEC Chair Gensler suggested all PoS assets could be considered securities a few days after ETH switched to PoS.
According to Deaton, the support of the SEC’s overreach by Bitcoin maximalists will eventually backfire, as the regulatory watchdog will likely turn on the firstborn crypto before long. “Perfect picture summarizing the danger in supporting government overreach just because the current overreach doesn’t involve the asset of your choice,” he said, responding to an artistic depiction of the current situation by LBRY.
U.S. Congress candidate January Walker previously asked the entire crypto community to support Ripple, as a victory for the SEC will eventually threaten the entire crypto industry. In response, the President of the Texas Blockchain Council, Lee Bratcher, claimed many crypto proponents believe XRP passes the Howey Test.