XRP lawyer John Deaton accuses SEC of targeting legitimate crypto companies
John Deaton, a lawyer representing XRP, has recently accused the US Securities and Exchange Commission (SEC) of focusing on legitimate crypto companies while turning a blind eye to actual fraudsters in the industry. In a post on X, Deaton specifically called out individuals like Sam Bankman-Fried (SBF) and Do Kwon for their alleged fraudulent activities.
Deaton criticized the SEC for missing instances of fraud in the crypto space due to what he described as a political agenda driven by SEC Chairman Gary Gensler and Senator Elizabeth Warren. He highlighted the fact that SBF, often referred to as the “Bernie Madoff of crypto,” had multiple meetings with Gensler and other prominent figures, raising questions about the motivations behind these interactions.
“SBF’s access to key lawmakers and regulators, including Rep. Maxine Waters and former CFTC Chair Rostin Benham, has raised concerns about the influence of financial contributions in gaining favorable treatment,” Deaton stated.
Deaton also pointed out the delayed action by the SEC in investigating Do Kwon and Terra’s operations, despite clear indications of fraudulent behavior. The SEC’s handling of the Kwon case was met with public backlash and ridicule, with memes portraying Gensler as Darth Vader circulating online.
Amanda Fischer, Chief of Staff at the SEC, defended the agency’s actions regarding Kwon, acknowledging that more aggressive measures could have been taken but attributing the delays to legal maneuvers by Kwon’s defense team.
Challenges to SEC’s enforcement strategy
The SEC’s enforcement approach in the crypto space has faced criticism from federal courts, with judges questioning the agency’s adherence to the law and accusing it of acting arbitrarily. Several legal defeats have raised concerns about the SEC’s handling of crypto-related cases.
One notable case was the SEC’s lawsuit against Coinbase, which accused the platform of operating illegally. However, recent reports suggest that the SEC is dropping the lawsuit against Coinbase, signaling a shift in its approach to crypto regulation.
Coinbase CEO Brian Armstrong welcomed the decision as a victory for the crypto community and credited crypto voters for influencing the outcome. He highlighted the importance of electing pro-crypto politicians to shape regulatory policies in the industry.
New direction under Trump’s SEC
Under the Trump administration, the SEC is introducing a new unit, the Cyber and Emerging Technologies Unit (CETU), to focus on cybercrime and financial misconduct. Led by Laura D’Allaird, CETU aims to protect investors while promoting innovation in the crypto space.
Acting SEC Chairman Mark Uyeda emphasized CETU’s role in addressing fraud cases related to AI, blockchain technology, and social media. The unit will target hackers involved in insider trading schemes and fraudulent activities on digital platforms.
Trump’s campaign promises to reform the SEC’s approach to crypto regulation have led to significant changes in the agency’s enforcement strategy. The establishment of CETU signals a shift towards a more balanced approach to regulating emerging technologies in the financial sector.