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Pro-XRP Lawyer John Deaton Calls for End To SEC Crypto Wars

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1 month ago

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Pro-XRP Lawyer John E. Deaton has urged for an end to the “crypto wars” led by the U.S. Securities and Exchange Commission (SEC). Deaton’s statement follows a series of high-profile legal battles involving major entities such as Ripple, LBRY, Coinbase, and others, which he argues have consumed substantial resources without addressing substantive fraud.

John Deaton Urges US Regulators to Drop Ongoing Crypto Cases

In a lengthy post on X, John Deaton, an attorney known for his support of Ripple and other crypto companies, vocalized his frustration with the ongoing regulatory actions by the US SEC. Deaton highlighted several cases where crypto companies have faced legal challenges and financial burdens despite not being accused of fraud. He argued that these cases have drained company resources and impacted the crypto industry negatively.

Additionally, John Deaton pointed out several instances where companies incurred substantial losses due to legal battles with the Securities and Exchange Commission. Notably, he mentioned that Ripple had spent over $150 million on legal fees in a case that did not involve any fraud allegations. 

This situation has affected Ripple’s operations and influenced its partnerships and market activities, with consequences for XRP holders.

The Pro-XRP Lawyer added,

“Having filed amicus briefs in the Ripple, LBRY, and Coinbase cases, representing users, developers, individual investors, and content providers, I’m sitting here thinking about the incredible waste of time, energy, money, and resources wasted during the last 4 years.”

Despite John Deaton’s call for a reduction in aggressive SEC actions, the regulator continues its strict oversight. Recently, the US SEC sued Digital Currency Group, citing failure to disclose risks tied to Three Arrows Capital, resulting in a $38 million settlement. 

Impact on Companies and Innovation

Further illustrating the impact of US SEC actions, Deaton referenced the case of LBRY, a platform that was shut down by the SEC without any fraud charges. The closure led to job losses and financial setbacks for its founder, Jeremy Kauffman. 

John Deaton emphasized,

“NO FRAUD was committed or even alleged. There was a very active LBRY community and ecosystem of users and content providers utilizing the platform. LBRY employees lost jobs. An American entrepreneur, Jeremy Kauffman, lost millions due to legal fees.”

Additionally, despite Kraken’s attempt to settle by paying a $30M fine, the platform faced subsequent lawsuits, showing a pattern of aggressive regulatory pursuits. According to the Pro-XRP Lawyer, these moves threaten innovation and the growth of the crypto sector.

Reevaluation of SEC’s Approach To Crypto Regulations

John Deaton’s appeals reflect a growing concern within the crypto community about how the US SEC handles cryptocurrency regulations. The legal expert suggests that a balanced approach would support the development of the crypto industry and uphold the integrity of regulatory practices.

In addition, other crypto leaders have also voiced their perspectives as Gary Gensler departs from the Securities and Exchange Commission. Most recently, Ripple CLO Stuart Alderoty openly mocked Gensler’s exit, signaling a potentially transformative shift in SEC’s crypto enforcement.

Despite criticism from figures like John Deaton, outgoing Securities and Exchange Commission Chair Gary Gensler insists on the necessity of strict regulatory oversight for the crypto market. He emphasizes the importance of enforcement actions to safeguard investors from risks in the crypto industry.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Regulation

Ripple Vs SEC Lawsuit May Take Longer To Settle Than Coinbase, Expert Warns

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20 hours ago

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February 21, 2025

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Ripple vs SEC lawsuit: The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) may take more time to resolve than the ongoing case involving Coinbase, legal experts suggest.

With a ruling already in place and other procedural complexities, experts believe that Ripple’s case faces a different set of challenges compared to Coinbase’s recent settlement.

Ripple Vs SEC Lawsuit May Take Longer To Settle

After the US SEC disclosed plans to drop the Coinbase lawsuit, speculations and debate have taken a turn on the potential of the Ripple vs SEC lawsuit outcome and when. However, legal experts have noted the Ripple lawsuit may not be as smooth as Coinbase case. One major factor making the Ripple vs SEC lawsuit more complicated is the ruling already handed down by Judge Torres. According to the filings, Ripple had been ordered to pay a $125 million penalty as part of the settlement with the SEC.

Subsequently, according to experts, the firm’s options now include the possibility of requesting a penalty reduction, which would require both parties to reach an agreement. Legal expert Sherrie, in a recent conversation on X, noted that while a settlement may be reached, it is unlikely that the separation of sales, as stipulated by Judge Torres, would be altered.

Any request to reduce the penalty, she said, would need to be carefully considered by both Ripple and the SEC. Additionally, a request to dismiss the appeal would mean that the original ruling by Judge Torres remains in effect.

“It’s more complicated for Ripple, given the existing ruling. The penalty would still stand unless both parties agree to a reduction,” Sherrie stated.

Ripple Cross-Appeal and Timing Considerations

Ripple vs SEC lawsuit involves more layers due to its cross-appeal, which must also be taken into account. Legal analysts suggest that the timing of Ripple’s upcoming filing—scheduled for April—may be pivotal in determining the case’s trajectory.

Ripple’s request to extend the filing deadline to April 16, 2025, gives further credence to the idea that a resolution may take longer than anticipated. As Ripple’s legal team moves forward with the appeal, both Ripple and the SEC will have to consider how to approach the next steps. As Ripple works toward securing an agreement or a potential settlement, it may continue to assess the possibility of lowering the penalty.

“Ripple’s next filing deadline is in April, which gives both parties more time to negotiate,” said legal expert Bill Morgan.

Ripple lawsuit Appellate Court’s Role

The involvement of the Appellate Court could also extend the timeline for resolving the Ripple vs SEC lawsuit. The court has a panel of three judges who will review and hear the case, a process that takes additional time compared to the procedures of a District Court. This contrasts with the process seen in the Coinbase case, where a settlement was reached more quickly, possibly due to the absence of such complications.

Eleanor Terrett, a FOX journalist, noted that the SEC may also choose to seek an agreement with Ripple at the district court level. The judge overseeing the case, Torres, retains jurisdiction until August 2025, and any changes to the terms of the ruling would require her approval.

“There’s a lot of uncertainty with the Ripple case. The SEC’s next steps are unclear, and any decisions may need Torres’s approval,” said Terrett.

Jeremy Hogan also suggested that Ripple vs SEC lawsuit might take longer to resolve due to the multiple steps involved in the appeal process.

“This isn’t just a straightforward case of settlement or dismissal,” Hogan remarked

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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ConsenSys Submits Letter to SEC on DeFi Rule Amendment Concerns

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21 hours ago

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February 21, 2025

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ConsenSys has submitted a letter to the U.S. Securities and Exchange Commission (SEC) expressing concerns about the proposed amendments to the definition of “exchange” under U.S. securities laws. The letter, addressed to Commissioner Hester Peirce and the SEC’s Crypto Task Force, requests the removal of the rulemaking from the regulatory agenda.

ConsenSys Challenges US SEC Proposed DeFi Rule Change

According to a recent submission, ConsenSys has urged the SEC to withdraw its proposed rule that expands the definition of an “exchange” to include decentralized finance (DeFi) platforms. The company argues that the amendments exceed the SEC’s legal authority.

ConsenSys asserts that the proposed rule violates the Administrative Procedure Act (APA) by improperly broadening the regulatory scope. Additionally, the company claims that the rule conflicts with the U.S. Constitution by imposing regulatory obligations on decentralized protocols that do not fit the traditional definition of an exchange.

SEC’s proposed amendments on DeFi exchanges received substantial opposition during the 2022 comment period. ConsenSys referenced prior submissions made in April 2022 and June 2023, reinforcing its position that blockchain-based systems should not be categorized as traditional financial intermediaries.

The submission to Hester Peirce’s task force comes just weeks after the launch of a dedicated website outlining its role in establishing clear crypto regulations. The new platform provides a way for industry participants, including ConsenSys, to submit input and engage with regulators.

Concerns Over US SEC’s Statutory Authority

Moreover, ConsenSys maintains that the SEC lacks the statutory authority to extend the definition of an exchange to blockchain-based systems. The company argues that the Securities Exchange Act of 1934 defines an exchange as an entity that provides a centralized market for securities transactions. The proposed rule, according to ConsenSys, improperly expands this definition to cover decentralized protocols.

The submission points out that DeFi platforms operate differently from traditional financial exchanges. Rather than facilitating transactions in a centralized manner, these platforms rely on smart contracts and peer-to-peer networks. ConsenSys warns that regulating these decentralized technologies as securities exchanges would create compliance burdens that are incompatible with their structure.

Consequences On Blockchain Innovation

The letter also warns that the amendments could negatively affect blockchain development and DeFi adoption. ConsenSys states that the proposed rule could discourage innovation by imposing regulatory uncertainty on blockchain developers and users.

The crypto company contends that the amendments could force decentralized platforms out of the U.S. market. By treating DeFi protocols as regulated exchanges, developers may face increased legal risks, reducing the incentive to create blockchain-based financial services within the country.

In its submission,  the crypto company has expressed willingness to discuss the issue further with the SEC’s Crypto Task Force. The company emphasized the importance of ensuring that blockchain regulations align with technological realities and legal constraints.

ConsenSys reaffirmed its stance that the SEC’s proposed rule should be removed from the regulatory agenda. With the new Hester Peirce Crypto Task Force, there is hope for ConsenSys and other blockchain firms facing regulatory scrutiny. 

Most recently, the pro-crypto task force influenced the decision to pause the SEC’s lawsuit against Binance for 60 days. The review of cryptocurrency regulations may lead to clearer guidelines, potentially benefiting DeFi platforms.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Coinbase scores major win as SEC set to drop lawsuit

Published

1 day ago

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February 21, 2025

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  • Coinbase says the SEC has agreed to dismiss its lawsuit against the US-based crypto exchange.
  • The SEC sued Coinbase in 2023 but with Gary Gensler’s exit, the regulator is eyeing better regulatory approach.

US-based crypto exchange Coinbase is set for a landmark development after the Securities and Exchange Commission reportedly agreed to dismiss its own lawsuit against the exchange.

Coinbase announced the huge news in a blog post on Friday, Feb. 21. Coinbase CEO Brian Armstrong also shared the development in an interview with CNBC’s Squawk Box.

“SEC staff has agreed in principle to dismiss its unlawful enforcement case against Coinbase, subject to Commissioner approval – righting a major wrong,” Coinbase chief legal officer Paul Grewal wrote.

Coinbase CEO Brian Armstrong also shared the news via X.

SEC vs. Coinbase ending

According to the exchange, the regulator’s decision to withdraw the case follows a settlement that does not involve any financial penalty against Coinbase. The next move is for the SEC commissioners to ratify the agreement and end a major legal hurdle that set the US crypto market back.

“While dismissal will be a major win for the rule of law – and a clear vindication of our position – most of all it will be a win for the entire industry and the 52 million Americans who have owned a digital asset,” Grewal added.

The SEC filed its lawsuit against Coinbase in 2023, accusing the exchange of operating an unregistered securities exchange. The lawsuit also included allegations of offering unregistered securities.

Coinbase contested the charges and sought a dismissal, with industry players criticizing then SEC Chair Gary Gensler of overreach amid regulation by enforcement approach.Notably, the SEC had also sued Binance, the world’s largest crypto exchange by trading volume. Other exchanges to come into the “rogue” agency’s cross-hairs is Kraken.

However, things at the securities watchdog have taken a crypto-friendly turn since Donald Trump’s election and the exit of Gensler and other Commissioners.

Acting chair Mark Uyeda has formed a crypto task force and renamed an enforcement unit amid the quest to balance compliance and the need to protect investors.

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