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Amidst the ongoing legal dispute between Coinbase Global Inc. and the United States Securities and Exchange Commission (SEC), lawyer John Deaton, representing XRP holders, asserts that SEC’s top regulator Gary Gensler is engaging in gaslighting of the American public.
Coinbase vs SEC: The Gear Shift Spotted
The current twist in Coinbase’s request for rulemaking came when the SEC denied the trading platform’s petition for rulemaking on three grounds.
These grounds include the fact that the existing securities laws apply to cryptocurrencies, that the “SEC addresses the crypto securities markets through rulemaking as well,” and that “it is important to maintain Commission discretion in setting its own rulemaking priorities.”
While these points are clear, John Deaton pointed out in the comment in the SEC Chair’s letter that “there is NOTHING unique or new about cryptocurrencies.” The basis upon which Coinbase filed for the rulemaking request in the first instance is hinged on how unique the crypto ecosystem is concerning the volatility of assets and how current laws categorize every asset as securities.
To Deaton, this position directly contradicts what the SEC Chairman said in his testimony to Congress earlier this year. At the hearing, Deaton recalled Gary Gensler saying crypto falls outside the purview of the commission as the nature of the asset class is unique and provides a regulatory gap.
@GaryGensler with the backing of @ewarren is 💯 gas lighting the American people. In this letter, he states that there is NOTHING unique or new about cryptocurrencies, and states existing laws easily apply to crypto.
BUT THAT’S NOT WHAT GENSLER SAID UNDER OATH.
At his… https://t.co/tlR7yEFMMS
— John E Deaton (@JohnEDeaton1) December 15, 2023
Deaton said Coinbase’s petition was hinged on the belief of the SEC with confirmation seen in the agency’s previous communications. The XRP holder’s lawyer said the SEC Chair has now made a 180-degree turnaround from his earlier position about crypto, labeling the move as politically motivated with support from Senator Elizabeth Warren.
SEC Still Need to Provide Clarity on Key Issues
The US SEC has been sending different signals about its position in the cryptocurrency ecosystem, either through the words of the SEC Chairman or the actions of the commission in general.
While the regulatory body is in an active lawsuit with Coinbase and Binance for trading crypto securities, it refused to file a petition in its lost battle with Grayscale Investments over the firm’s bid to convert its Bitcoin Trust to an active spot Exchange Traded Fund (ETF) product.
While the anticipation for such a product has grown in recent times, the recent claim that crypto is not a priority as the SEC Chairman revealed recently is casting some doubts on what the future holds for the industry as the Bitcoin ETF approval window in earlier January draws near.
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