The post John Deaton Sparks Controversy Over SEC’s Interaction with Coinbase appeared first on Coinpedia Fintech News
John Deaton, a renowned attorney with expertise in cryptocurrency and particularly an advocate for XRP, has caused a stir with a series of statements concerning the SEC’s interaction with Coinbase, something that has made many headlines since yesterday.
Deaton’s Dilemma: Fairness and SEC
Deaton’s commentary centers on the perceived incongruities in the SEC’s approach. He reflects on the agency’s approval of Coinbase’s IPO, including the process of Acceleration, only to instruct the company two years later to delist all tokens except Bitcoin.
While acknowledging that approval of the registration filing does not imply a wholesale endorsement of Coinbase’s business model, the lawyer is critical of the inconsistency.
He highlights that the SEC’s senior personnel had publicly lauded Coinbase’s framework for determining token securities before the IPO. This mixed message appears, to Deaton, a sign that political considerations might be influencing regulatory decisions.
A Deeper Look
Deaton pushes further to question how the SEC’s conduct aligns with its core mission. He argues that if the organization can approve Coinbase’s IPO and later turn around and demand changes that could potentially cost American investors billions of dollars, then the entire structure and philosophy of the SEC need to be re-examined.
He urges a thoughtful reevaluation of the policies, like Section 5 of the 1934 Securities Act, that might not apply equally in today’s internet-driven age. Deaton emphasizes a potential shift in focus for the agency toward individual responsibility and fraud prevention, rather than overprotecting people from their own investment choices.
What Spark the Comments
The conversation that ignited John Deaton’s impassioned response began with a tweet from Dave Weisberger, CEO of CoinRoutes. He said that if the allegations are true, it shows a violation of the SEC’s two main objectives: providing investors with accurate information and maintaining stable markets.
Weisberger’s concerns include potential massive financial losses for U.S. investors and unexpected opportunities for foreign investors, including those operating offshore hedge funds. He also warns that enforcing tokens to register could create severe consequences for investors due to a lack of proper disclosure for specific token economics.
