XRP Lawyer Slams SEC’s Double Standards and Calls for Regulatory Clarity

In a recent Twitter exchange, John Deaton, the founder of Crypto-Law.US and a well-known supporter of Ripple, criticized the regulatory environment for crypto companies provided by the U.S. Securities and Exchange Commission (SEC). Meanehile CoinGape reported that XRP community along with Attorney Bill Morgan and Deaton has expressed concerns with the delay in Judge Torres’ ruling.

Pro Ripple Lawyer Calls Out SEC

Responding to a tweet by @lex_node about the importance of “KYC-ish crypto things” for system security and centralization, Deaton agreed that big token holders should be required to disclose their identities and the percentage of token supply they control.

Deaton further highlighted how Ripple Labs had implemented cryptographic escrow and started publishing quarterly reports on XRP sales, demonstrating transparency. However, he claimed that the SEC used this transparency against Ripple and its CEO, Brad Garlinghouse, in the ongoing legal proceedings.

The SEC, however, used all of this “transparency” against Garlinghouse and Ripple. Interestingly, Hinman was asked if he and the SEC had found out how much ETH @ethereumJoseph @VitalikButerin @Consensys @ethereum owned at the time of the speech, and he testified that they did find out during their due diligence when evaluating #ETH but could not remember the numbers or percentages regarding token ownership.

– John E. Deaton, July 10, 2023

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The role of Ethereum in the XRP Lawsuit

The speech by William Hinman, the former director of the SEC’s Corporation Finance division, in 2018, which discussed crypto assets and their classification as securities. Hinman was asked if the SEC had determined the number of Ether tokens held by Ethereum co-founders Joseph Lubin and Vitalik Buterin. Hinman testified that the SEC had access to that information but couldn’t recall the specific numbers or percentages related to token ownership.

The long running legal tussle between Ripple and US SEC is still awaiting a summary judgment. Revelation of the infamous Hinman speech linked documents and emails sent out a positive sentiment regarding the XRP lawsuit ending soon. It was also reported that Ethereum is favoured over other cryptos by SEC.

While the SEC had previously declared both Bitcoin and Ethereum to be commodities, exempting them from regulatory actions, SEC Chairman Gary Gensler hinted earlier this year that Ethereum could potentially be classified as a security. Deaton tweeted recently to clarify his stance on XRP being a security.

Also Read: XRP Lawsuit: Pro-Ripple Lawyer And Community Voices Concern Over Summary Judgment