John Deaton, a lawyer known for advocating for cryptocurrency investors, has once again made headlines.
After offering to testify at a congressional hearing on digital assets, Deaton has now directed his attention towards criticizing lawyers at the United States Securities and Exchange Commission (SEC).
Deaton, who is recognized for his role as amicus counsel representing over 75,000 XRP holders in the Ripple lawsuit, as well as his involvement in the LBRY.com case, has now called SEC Chairman Gary Gensler to be removed. He cites a ‘lack of faithful allegiance to the law’ as the basis for his call.
Deaton reflects on his time as a federal prosecutor “with pride and honor”. He asserts that government attorneys should embody the highest ethical standards.
In the legal system, defense attorneys, like those representing Ripple or Coinbase, should act in the interests of their clients. Deaton points out that this often leads to a conflict of interest regarding the representation of stakeholders, such as XRP holders in the Ripple case. He stresses that while this is standard practice for defense lawyers, federal prosecutors are held to a different standard.
Deaton argues that federal prosecutors, whether in civil or criminal cases, should be driven by the law and the notion of justice. Their competitiveness and desire to win should stem from a commitment to these principles. He shares a hypothetical scenario involving the DOJ’s prosecution of FTX founder Sam Bankman-Fried.
He wrote: “If I were one of the DOJ lawyers prosecuting SBF, I guarantee you I would’ve been competitive and made sure that the other side didn’t outwork me, and I would’ve wanted to win that case and put him in prison for decades. In fact, when the call from above came down to drop the campaign finance charges against him, I would’ve likely been fired because I would’ve refused to sign the dismissal, and I would go public with why and who dropped the case.”
Highlighting the recent criticisms from Coinbase’s Chief Legal Officer, Deaton criticizes the SEC for its alleged inconsistency and hypocrisy. He references Judge Netburn’s use of the term ‘hypocrisy’ to describe how SEC lawyers have contradicted their arguments in various cases. This behavior, Deaton argues, demonstrates a departure from the allegiance to the law. It also, he claimed, focuses on winning arguments over serving justice.
Deaton says federal district and appellate court judges echo his concerns. He cites examples from various cases, including Ripple, Grayscale, and the Voyager bankruptcy, where judges have observed similar patterns of behavior from SEC lawyers.
Concluding his argument, Deaton calls for significant changes within the SEC. He suggests that people, including SEC Enforcement Director Jorge Tenreiro, should be held accountable for failing to uphold the principles of justice and integrity. He advocates for the dismissal of those who have strayed from these core values, emphasizing the need for reform to restore honor and integrity in representing the United States.
The SEC did not immediately respond to a request for comment.