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XRP's Deaton: Don’t Hold Your Breath for Sensible Crypto Regulation
We’ve tried to remain optimistic that after the knee-jerk reactions and election-year grandstanding that more serious minds would take up the issue of crypto regulation, focusing on bringing a more updated mindset and a sense of clarity to the debate. And in fact we’ve seen signs that some of those with their hands on the levers of power are looking at the crypto space with a mature perspective – from a growing number of younger legislators in Congress to key international policy makers who appear to recognize that DeFi shouldn’t be governed with TradFi tools.
But XRP community attorney John Deaton is not so optimistic. He believes we won’t see sensible crypto legislation anytime soon.
In the absence of regulatory clarity in the United States, Deaton asserted that the nascent industry can only receive guidance through judicial results from the Securities and Exchange Commission’s “regulation by enforcement policy.”
“In other words, guidance will come by Federal District Court decisions likeLBRY, Ripple, and Dragonchain, etc.,” Deaton noted while calling on industry players to unite in the fight against the SEC’s enforcement-only policy.
As part of efforts to fight against the SEC’s enforcement-only policy, Deaton said tech journalist and TV producer Naomi Brockwell chose him to represent her in the LBRY lawsuit. TheCryptoBasic reported last month that attorney Deaton dived into the LBRY lawsuit by requesting permission to file an amicus brief on behalf of Brockwell.
While the court has ruled on LBRY’s summary judgment in favor of the SEC, Deaton said the regulator conceded on record that many holders of LBRY’s native token did not adopt the cryptocurrency for investment purposes.
Yes, the LBRY summary judgment decision has been made and the SEC received a TOTAL VICTORY from the Judge’s ruling.
The SEC conceded ON THE RECORD that many (if not most) #LBC token holders did NOT view #LBC as an investment and that they utilize the token for consumptive use.
— John E Deaton (@JohnEDeaton1) January 22, 2023
However, the SEC has refused to provide clarity regarding LBC secondary market transactions despite LBRY CEO Jeremy Kauffman’s request.
“When asked by @jeremykauffman and “STRONGLY ENCOURAGED” BY THE JUDGE to provide clarity regarding secondary transactions of #LBC, the SEC has refused,” Deaton said.
He noted that the presiding judge of the LBRY v. SEC lawsuit uttered the words “secondary market/ transactions” and “clarity” over a dozen times. However, the SEC argued that the secondary market is not included in the case, adding that it is not its duty to provide clarity.
Deaton said the SEC is seeking an injunction that does not distinguish between LBRY, its executives, and users of the platform, with a hearing scheduled on January 30 to discuss the issues.
The founder of Crypto Law said many people have informed him that he is fighting a “losing battle.” While Deaton believes they may have a point, he stressed that fighting these legal brawls with the SEC is important as clarity through legislation will not happen anytime soon.