Attorney Deaton slams the U.S. SEC over its failure to provide regulatory clarity for the crypto industry, asserting that the watchdog has lost its way.
CryptoLaw founder Attorney John Deaton has slammed the United States Securities and Exchange Commission (SEC) and its chairman Gary Gensler. Attorney Deaton argued that Gensler is a bad faith regulator who deserves most of the blame he has received recently.
However, Deaton believes Gensler is not the only one to blame for the lack of regulatory clarity for the U.S. crypto industry. According to the outspoken attorney, the SEC, as an agency, has lost its way.
As bad as @GaryGensler is (he’s a bad faith regulator – hard ?), and as much blame he deserves (he deserves most of it), he is not the only one deserving of criticism. The SEC, as an agency, has lost its way. Mark is correct, Crypto is one more technology that will succeed or… https://t.co/QwyUXgDbC1
— John E Deaton (@JohnEDeaton1) July 4, 2023
Cuban Lambasts SEC’s Regulatory Tactics
The pro-XRP lawyer made this known in reaction to a tweet by American businessman Mark Cuban. Yesterday, Cuban said no U.S. investors would have lost money in the FTX debacle if the SEC had set clear regulations like Japan did.
You should read up on how Japan deals with regulation. https://t.co/yHCVwZAqvG
When FTX crashed, NO ONE IN FTX JAPAN LOST MONEY.
If the USA/SEC had followed their example by setting clear regulations that required the separation of customer and business funds and clear… https://t.co/Msvn9o9PCU
— Mark Cuban (@mcuban) July 4, 2023
Per Cuban, nobody in Japan lost money following the FTX collapse. This is because the country’s regulation requires the separation of customer and business funds and clear wallet requirements.
“But of course, they [SEC] chose to litigate to regulate. You need to face the fact that crypto is one more technology that will succeed or fail based on its merits,” Cuban added.
Deaton Says SEC Prefers Lack of Clarity
In response, attorney Deaton agreed with Cuban’s views, saying that crypto will either fail or succeed on its own. He noted that the market will decide whether crypto will succeed or fail.
He noted that the commission ignored the recommendation for a safe harbor in 2018 by Commissioner Hester Peirce. Deaton slammed the SEC for preferring a lack of clarity and scenarios where the law is vague.
The pro-XRP lawyer asserted that the Hinman Speech emails prove that the SEC prefers vague law. Notably, the emails released last month involve internal deliberations at the agency while drafting Hinman’s speech.
According to Deaton, the General Counsel warned Hinman against declaring Ethereum as non-security simply because the remark could limit what the SEC could say about ETH’s future sales.
Furthermore, other top SEC officials also argued that Hinman should say less during his infamous 2018 speech to give the agency more options in the future.
Per Deaton, the absence of regulatory clarity is all about giving the SEC more prosecutorial options in the future.
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