A bankruptcy judge has bashed regulators for failing to create clear rules for the nascent market.
Attorney John E. Deaton has asserted that judges would be forced to draw attention to perceived lack of allegiance to the law, overreach, and inconsistent statements from the United States Securities and Exchange Commission (SEC) in its crypto enforcement actions.
The pro-XRP attorney and CryptoLaw founder expressed this in a tweet yesterday. It came in response to a Twitter thread from Coinbase’s Chief Legal Officer Paul Grewal, highlighting a recent ruling in the Voyager bankruptcy proceeding.
In the ruling, Judge Michael E. Wiles called out regulators for fueling uncertainty in the nascent market. Judge Wiles bashed regulators for failing to create clear rules for the nascent market and their constant tussle for control, further fueling uncertainty in the market.
“If the current regulatory environment can be characterized as uncertain, the future regulatory environment can only be characterized, in my mind, as virtually unknowable,” the judge surmises.
Responding to the thread, Deaton asserts that the regulator is losing in court. According to Deaton, the law is not on the SEC’s side.
“As I said in @CryptoLawUS’s livestream, the SEC is losing in Court,” Deaton tweeted. “The truth is, the SEC does not have the law on its side. Then when you couple the SEC’s overreach along with its inconsistent statements and behavior, Judges will be forced to call the SEC out.”
As I said in @CryptoLawUS’s livestream, the SEC is losing in Court. The truth is, the SEC does not have the law on its side. Then when you couple the SEC’s overreach along with its inconsistent statements and behavior, Judges will be forced to call the SEC out. https://t.co/T1ImMG19fV
— John E Deaton (@JohnEDeaton1) March 15, 2023
It is worth noting that the regulator has taken several losses in court in recent weeks. As highlighted by Ripple’s Chief Executive Officer Brad Garlinghouse last week, the agency had racked up losses in rulings in three separate cases at the beginning of last week alone.
As recently reiterated by Deaton, Judge Sarah Netburn called out the SEC in the Ripple case last July for “adopting its litigation positions to further its desired goal and not out of a faithful allegiance to the law.”
This year, the SEC has ramped up its crypto enforcement efforts, going after Gemini, Genesis, Kraken, and Paxos in two months. Meanwhile, as highlighted in a recent report, it appears the regulator has no immediate plans of applying the brakes on its crypto enforcement efforts, as FOX Business reporter Eleanor Terrett disclosed the agency’s emphasis on crypto enforcement in its latest budget proposal.