Deaton Says SEC Chair Has No Clue When Claiming Securities Laws Apply to Most Cryptos

Attorney Deaton has slammed the SEC chairperson for claiming that securities laws apply to most crypto assets.

Attorney John Deaton, the Managing Partner of Deaton Law Firm, has slammed the chairman of the SEC, Gary Gensler, over his recent claims on the crypto industry.

The pro-XRP lawyer called out Gensler while reacting to a recent Bloomberg interview featuring Gensler.

Securities Laws Apply to Most Crypto

In the interview, Gensler said that although securities laws apply to most crypto assets, investors should not assume they are getting protection from these laws. 

“A lot of investors should be aware that it [crypto] is not only a highly speculative asset class, it is also one that they currently shouldn’t assume they are getting the protections of the securities laws, even though the securities laws apply to many of those tokens without prejudging anyone,” Gensler was quoted as saying.

Deaton Reacts

Attorney Deaton said the SEC chair is either gaslighting the public or has no idea of what he is saying. According to Deaton, securities laws do not apply to cryptocurrencies. However, the law can apply to offering and selling crypto assets, including Bitcoin. 

Deaton cited the lawsuit between the SEC and Shaver’s as an instance where securities laws apply to the offer and sale of Bitcoin.

“Stop saying that these tokens are more like securities because they lack intrinsic value and are used to speculate,” said Deaton.

@GaryGensler has no clue what he’s talking about or he is intentionally gas ⛽️ lighting the public. Securities laws to not apply to these tokens. Securities laws may apply to the offer and sell of tokens, including #BItcoin (like they did in SEC v. Shavers in 2013), as well as… https://t.co/9Qav272jVl

— John E Deaton (@JohnEDeaton1) July 27, 2023

Per Deaton, the Supreme Court made it clear in the Howey case that to determine security, it is imperative to analyze whether a transaction, contract, or scheme satisfies the prong of the Howey test.

Additionally, he noted that the apex court also stated that whether the underlying asset has intrinsic value is immaterial. Deaton said that it was high time Gensler stopped ignoring the law.

Crypto Law Shades Gensler

To further buttress his point, Deaton retweeted a tweet from Crypto-Law. US. According to the tweet, the Howey decision indicates that Gensler does not have authority over the underlying asset but its sales.

Furthermore, Crypto-Law.US also pointed out that the SEC boss has no authority to regulate blind bid transactions like those on digital exchanges. The media outlet further took a swipe at Gensler, saying he was out of arguments.