Pro-Ripple Lawyer Says SEC Targets Crypto to Back Corporate Capitalism

John E. Deaton, a pro-XRP lawyer has stated that the Securities and Exchange Commission’s (SEC) actions against the crypto industry reflect an underlying agenda to preserve corporate capitalism rather than protecting investors.

Deaton highlights what he perceives as an attack on cryptocurrencies, particularly in the context of the SEC’s actions against Coinbase and Ripple. His remarks touched on various aspects, including the accredited investor rules, the SEC’s approach to crypto regulation, and its stance on retail investors in the Ripple case.

Deaton’s Observations

Deaton’s statement on Twitter reflects his belief that the United States operates under a system of corporate capitalism rather than a true capitalist system. He points out several aspects of the current financial landscape to support his claim.

For years I’ve said we don’t exist in a true capitalist system. We have corporate capitalism in the U.S. Look at the accredited investor rules and how they discriminate against the working class. Look at the attack on Crypto and the attack on Coinbase which allows non-accredited… https://t.co/JVis3xw30f

— John E Deaton (@JohnEDeaton1) July 29, 2023

According to the legal expert, the SEC’s allocation of limited resources toward Section 5 cases and attacking the secondary market on exchanges, rather than focusing on fraud within the crypto space, is indicative of misplaced priorities. He argues that this approach may stifle innovation and growth in the emerging crypto industry.

Furthermore, Deaton points out the SEC’s objection to retail investors acting as amici curiae (friends of the court) in the Ripple case. The SEC’s stance, according to Deaton, indicates a reluctance to consider the perspectives of retail investors, further reinforcing the perception that the regulatory body may prioritize the interests of larger financial institutions over those of the average investor.

Double Standard in Crypto Regulation?

Another major concern raised by Deaton is the perceived double standard in crypto regulation.   He criticizes the SEC for refusing to dialogue with major players like Coinbase, which has been proactive in striving to comply with regulations. 

Deaton points out that SEC Chairman Gary Gensler met multiple times with Sam Bankman-Fried, the former CEO of FTX, an offshore crypto exchange despite allegations of FTX defrauding users but failed to discuss with executives of Coinbase.

This disparity in treatment raises questions about the effectiveness and fairness of the regulatory body and the broader framework for digital assets. The SEC’s approach to different players in the industry may hinder the growth of innovative startups while potentially favoring more well-established entities.