Crypto lawyer John Deaton calls for coordination against SEC’s anti-crypto efforts

Crypto lawyer John Deaton calls for coordination against SEC’s anti-crypto efforts

Crypto lawyer and XRP advocate John Deaton has stepped in Twitter assembling a group of companies and individuals that the SEC has claimed have violated Section 5 of the Securities Act. Deaton is seeking those who issued, offered or sold a token that the SEC believes satisfies the Howey test and is subject to an investigative subpoena or asked to settle before enforcement.

Deaton clarified that he does not look for cases involving genuine fraud or fraud that harmed investors. Instead, he is interested in software code that the SEC claims is an investment contract, regardless of the seller or the circumstances surrounding the sale.

Coordination versus coordinated effort

In his tweets, the crypto lawyer pointed out that it would have been beneficial if Ripple and LBRY’s defense team had communicated with each other. This comment comes as Gensler, the SEC chairman, is beefing up the staff committed to crypto enforcement actions. According to Fox Business journalist Eleanor Terrett, Gensler already doubled the staff assigned to crypto last year.

Deaton and other XRP supporters see Ripple as the best chance for the US crypto industry against the SEC’s negative enforcement policies. LBRY, an open source content distribution network, noted that other crypto players in the United States may be playing offense but are not. As a result, everything is on XRP to save the industry.

In light of the SEC’s actions, Deaton calls for a coordinated effort to counter anti-crypto pushback. With the SEC actively pursuing enforcement actions against crypto companies and individuals, it is more imperative than ever to work together to defend the industry.

See also  Silicon Valley Bank's downfall has many causes, but crypto is not one

SEC’s Definition of Investment Contracts

Deaton and other industry experts are concerned about the SEC’s interpretation of investment contracts, as evidenced by current case law. The company involved asked the SEC to justify why the desire to use or consume the sold product is not an additive unique material value and under the control of the individual purchasers to create a justification for the purchase at the time of purchase.

The SEC’s response argued that if an alleged consumer use is reversible or transitory, it is fully compatible with trade or exchange. An investor may “consume” a token purchased primarily or entirely for investment purposes without impairing its investment potential. As a result, the SEC can argue that anything that has a potential market can become a security.

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *