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HomeCrypto NewsMarketDeaton Says This Investigation Could Lead to Gary Gensler's 'END'

Deaton Says This Investigation Could Lead to Gary Gensler’s ‘END’


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Deaton supports claims that the SEC protects Chinese interests at the expense of American national security.

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Attorney John E. Deaton has asserted that a congressional investigation into the United States Securities and Exchange Commission’s failure to investigate questionable Chinese investments by Sequoia Capital could be the SEC chair Gary Gensler’s undoing.

The lawyer representing thousands of XRP holders in the SEC case against Ripple expressed this in a tweet on Saturday, pointing out that Sequoia was also an FTX investor. It came in response to a thread by Brian Costello, a technology executive with a background in international finance. Costello, in his thread, calls out Congress for playing a role in allowing China to become a more significant threat to U.S. national security by turning a blind eye to the reluctance of the Gensler-led SEC to investigate firms like Sequoia.

As explained by Texas Senator John Cornyn, who Costello’s comments are directed at, investments from venture capitals like Sequoia have fueled predatory economic policy in China while also supporting the Chinese People’s Liberation Army’s arms race which he claims threatens world peace.

Costello shared a FOX interview where Colonel Derek Harvey, a former member of the National Security Council and the House intelligence committee investigation into China, disclosed that the Federal Bureau of Investigation, investigating findings of the committee similar to the claims made by Senator Cornyn, had faced resistance from the SEC and Department of Justice. However, in the same interview, Costello points to significant political funding from Sequoia in the U.S. mid-term elections as a possible reason for the stonewalling.

Notably, the claims against Sequoia surround the activities of Neil Shen, a founding partner of Sequoia China and a senior Chinese government advisory body member.

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It is not the first time that Deaton and Costello have seemingly agreed on perceived SEC corruption in the service of Chinese interests. A blog post by the lawyer from September 2021 draws links between the case against Ripple and the then SEC chair Jay Clayton’s links with Alibaba, which owns Alipay, a cross-border payment platform offering services similar to Ripple’s On-Demand Liquidity service.

In August last year, Costello released a blog post suggesting that the controversial 2018 Bill Hinman speech resulted from Chinese initial public offering interest among Wall Street elites interested in blockchain. Notably, most Bitcoin and Ethereum mining firms were resident in China. The Hinman speech paved the way for these firms to launch IPOs in the U.S. which largely benefitted law firms and Wall Street firms that Hinman and Clayton have worked with.

In the same article, the tech executive asserted that Gensler seems bent on continuing this legacy of protecting Chinese interests at the expense of American customers, as he has also expressed reluctance to investigate Chinese firms. Costello cited regular meetings with Chinese representatives and Gensler’s portfolio dominated by Vanguard funds heavily weighted in Chinese stock to support his claims.

It is worth noting that the FTX collapse has only increased public scrutiny of the SEC chief.

At press time, the SEC is yet to respond to requests for comment.

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Okoya David
Okoya David
Okoya David Kio is a crypto enthusiast passionate about understanding what makes the nascent market tick. When he's not pondering about cryptocurrencies, you might find him in a BP debate room trying to proffer solutions to age-old societal problems.

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