XRP Holder’s Lawyer Says SEC Chair Has No Clue What is or Isn’t a Security

John Deaton, the pro-XRP lawyer and founder of CryptoLaw has come out to slam Gary Gensler, the Chairman of the United States Securities and Exchange Commission (SEC) for not knowing what asset truly qualifies as securities.

SEC Chair and Securities Law Understanding

According to Deaton, Gensler seems not to have a grounded understanding of what the laws governing securities are, rather he misinterprets the law. 

Citing an example, Deaton noted that “if an asset is being promoted by someone,” the SEC Chair believes that “….it transforms the asset into a security.” By this interpretation, Gensler downplays the U.S. securities laws which do not apply to the purchase of an asset for non-investment use cases.

I don’t care that @GaryGensler taught at MIT. The man has has no clue what is or isn’t an investment contract aka, a security. According to him, if an asset is being promoted by someone it transforms the asset into a security. He completely ignores the fact that U.S. securities… https://t.co/0NxRRMZ696

— John E Deaton (@JohnEDeaton1) October 1, 2023

The SEC boss has been accused of plaguing the entire crypto industry since his reign as Chairman. He has continuously propagated the narrative that all cryptocurrencies but Bitcoin (BTC) are security and as such, fall under the jurisdiction of the agency. 

At a time when the Commission was at loggerheads with the Commodity Futures Trading Commission (CFTC), Gensler emphasized that all Proof-of-Stake (PoS) tokens and digital assets should also be treated as securities.

Explaining his stance further, Gensler noted that crypto investors “might drop their tokens overseas at first and contend or pretend that it’s going to take six months before they come back to the U.S. But at the core, these tokens are securities because there’s a group in the middle and the public is anticipating profits based on that group”.

Crypto Proponents Wants Gensler to Go

In a recently held congregational hearing, he further reiterated his sentiment on BTC’s non-security status, but in no clearer terms. 

This has generated a lot of controversies in the crypto market and has even led to legal battles between the regulator and crypto firms. Ripple Labs, Binance, and Coinbase were some of the firms charged separately for violation of securities laws by the SEC. 

In both Binance and Coinbase’s lawsuits, Cardano (ADA), Polygon (MATIC), Solana (SOL) and many other crypto assets were tagged securities. With all of these supposed animosities towards crypto assets and the industry, crypto enthusiasts including Deaton, are now seeking Gensler’s exit from the SEC.