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SEC’s Crypto War is Politically Motivated According to Lawyer

Published August 3, 2023 3:00 PM
Teuta Franjkovic
Published August 3, 2023 3:00 PM
Key Takeaways
  • Crypto attorney accused the SEC chair of putting his political aspirations ahead of the investors’ needs
  • SEC allegedly planned timed cases to coincide with planned congressional hearings on crypto restrictions
  •  A study of the chart shows six occurrences that occurred in 2023

Well-known crypto attorney John Deaton accused  Securities and Exchange Commission (SEC) Chair Gary Gensler of putting his political aspirations ahead of the needs of regular investors.

Deaton’s claims coincide with a growing trend of SEC cases that are timed to coincide with upcoming congressional hearings on rules pertaining to cryptocurrencies.

As a strong supporter of reasonable crypto legislation, Deaton wasn’t holding back when he called Gensler a politician more concerned with advancing his political career by pandering to the “anti-crypto army.” Deaton said, pointing to a graphic that showed the chronological order of SEC actions concerning Congressional events:

“Not only does he not care about retail investors, I believe he has genuine contempt for retail investors,” he commented on Twitter.

The chart’s author, Jeff Roberts, attacked Gensler’s media strategies, claiming that they divert attention from significant legislation relating to cryptocurrencies being proposed in Congress and instead focus on the SEC.

Deaton Calls Gensler a Bully

Deaton has already publicly lambasted Gensler and the SEC for their anti-crypto positions. He previously questioned the SEC Chair’s opinions on cryptocurrency tokens, and he was charged with potentially misleading the public and “ignoring the law.”

The lawyer for Pro-XRP described his conversations with witnesses who were present in the SEC chair’s room. According to Deaton, Gensler is adamant on proving to everyone that he is the smartest person in the room.

The lawyer attacked Gensler even harder, pointing out that he was the same young prodigy who became the youngest partner in Goldman Sachs’ history. Everyone dislikes him.

Deaton’s Conflict

Recently, Deaton has generated controversy for his remarks regarding the SEC’s dealings with Coinbase. In particular, he drew attention to the agency’s apparent contradictions in approving Coinbase’s initial public offering (IPO) and then ordering the delisting of all tokens but Bitcoin.

The fascinating remarks have generated a lot of discussion in the cryptocurrency industry and raised concerns about possible political influence and regulatory decisions.

In his analysis, Deaton drew attention to senior SEC officials’ praise for Coinbase’s token securities structure prior to the IPO, raising questions about conflicting messages and possible political influence on regulatory choices.

In light of the internet-driven era, Deaton called for a careful reevaluation of the SEC’s regulations, such as Section 5 of the 1934 Securities Act. He suggests that instead of overly shielding investors from their own decisions, the emphasis should be shifted toward personal accountability and the avoidance of fraud.

Democrat Vs. Republican Divide On Crypto

In a bipartisan vote last month, the House Financial Services Committee adopted a historic bill that would revamp cryptocurrency regulation, signaling a significant win for the digital asset lobby’s legitimacy campaign.

The Republican-led legislation, which is a component of a larger plan that the House Agriculture Committee has for the first time put requirements into federal law about how the SEC and the CFTC, two important market regulators, police cryptocurrency trading.

The top Democrat on the Financial Services Committee, Rep. Maxine Waters (D-Calif.), opposed  the idea, calling it “a wish list of Big Crypto” and organizing members to reject it. Nevertheless, the committee adopted the plan on a vote of 35 to 15. Six Democrats opposed the bill, defying Waters.

The disagreement highlights the shaky politics surrounding cryptocurrency regulation in the wake of a market bubble and bust that exposed extensive mismanagement in the sector and safety issues for consumers.

The legislation’s draughters, House Republicans, claimed that their goal was to close regulatory gaps in the current framework and discourage digital asset companies from moving their operations out of the United States and into nations with crypto-specific laws.

The bill would establish additional restrictions on the SEC, a regulator that has been more active in enforcing investment law infractions and monitoring cryptocurrency fraud, while also giving it express authority over digital assets.

Democrats criticized Republicans for hurrying the process. They claimed the plan was pointless and would make it more difficult for the SEC to regulate digital asset companies, as the agency already brings enforcement actions related to cryptography under current law.

 

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