Pro-crypto attorney and U.S. Senate candidate John Deaton has accused the Securities and Exchange Commission (SEC) of causing retail investors to lose over $15 billion due to its aggressive regulatory approach toward the cryptocurrency industry. Deaton, known for his advocacy for XRP investors, voiced his concerns in a September 13 post on X (formerly Twitter).
Deaton’s Criticism of the SEC’s Actions
Deaton, who represents 75,000 small investors, argued that the SEC’s “misconduct and gross overreach” had a devastating financial impact on these investors. He emphasized that he would not accept an apology from the SEC, holding the agency accountable for its enforcement tactics.
In his statement, Deaton criticized Senator Elizabeth Warren, claiming she has not addressed the SEC’s actions. Deaton, who recently won the Republican nomination for the U.S. Senate in Massachusetts, is set to challenge Warren in the November 2024 election.
SEC’s Shifting Stance on Cryptocurrencies
In a surprising twist, the SEC has recently appeared to backtrack on its longstanding view that cryptocurrencies are inherently securities. This change in stance was revealed in a court filing shared by Coinbase’s chief legal officer, Paul Grewal, on September 13. The SEC acknowledged in the filing that its previous statements, which labeled cryptocurrencies as securities, may have caused confusion.
This development is notable given the SEC’s past position that tokens such as XRP were securities, a claim that led to a legal battle involving Deaton. In response, Deaton highlighted the inconsistency, remarking that he had simply asked the SEC to clarify that XRP itself was not a security. Instead, he claims the SEC retaliated against him.
Recent SEC Enforcement Actions
Despite this shift in rhetoric, the SEC continues to take a hard line on certain crypto platforms. On September 12, the SEC settled with eToro, a popular trading platform, requiring its U.S. branch to halt trading for most cryptocurrencies and imposing a $1.5 million fine. This action underscores the SEC’s ongoing enforcement-heavy approach, despite its evolving stance on whether cryptocurrencies themselves are securities.
