John Deaton, a prominent pro-XRP lawyer, has called for an end to the U.S. Securities and Exchange Commission’s (SEC) ongoing legal battles against cryptocurrency companies. Deaton’s statement comes after a series of high-profile cases, including those involving Ripple, LBRY, and Coinbase, which have drained significant resources from these companies despite the lack of fraud allegations.
Ripple’s Legal Burden: Deaton highlighted that Ripple spent over $150 million on legal fees in a case that did not involve fraud, negatively affecting its global operations and partnerships. The ongoing case has been a financial and operational strain on Ripple, with lasting consequences for XRP holders.
Impact on LBRY and Jobs: Deaton also pointed out the SEC’s action against LBRY, which led to the platform’s shutdown despite no fraud being alleged. This resulted in job losses for LBRY employees and millions of dollars in legal costs for its founder, Jeremy Kauffman.
Kraken’s Ongoing Struggles: Despite paying a $30 million fine, Kraken continues to face SEC lawsuits, leading to further legal costs and uncertainty for the platform.
Waste of Resources: Deaton expressed frustration over the resources wasted in the SEC’s cases, noting the significant financial burdens and setbacks to innovation in the crypto sector. He specifically mentioned the Ripple, LBRY, and Coinbase cases, in which he filed amicus briefs on behalf of users, developers, investors, and content providers.
Deaton criticized the SEC’s aggressive regulatory actions, which he believes are stifling innovation in the crypto industry. He argues that these legal battles are unnecessary, especially when fraud has not been proven, and are harming the industry’s growth.
The SEC’s Ongoing Crackdown: Despite Deaton’s calls for a shift in approach, the SEC continues its strict oversight of the crypto industry. Recently, the SEC sued Digital Currency Group over a failure to disclose risks related to Three Arrows Capital, resulting in a $38 million settlement.
Rethinking Crypto Regulations: Deaton, along with other figures in the crypto community, has pushed for a more balanced approach to crypto regulations. He believes that proper regulatory frameworks would allow the industry to thrive while safeguarding investors. Meanwhile, Gary Gensler, the SEC’s outgoing chairman, has defended the necessity of stringent regulatory actions, arguing that they are crucial to protecting investors from risks in the volatile crypto market.
As the debate continues, many are watching closely for any shifts in the SEC’s approach to cryptocurrency oversight, especially as new leadership takes charge.
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