Pro-XRP Lawyer Deaton Accuses SEC’s Gensler Of ‘Infecting’ Ethical Standards

As a researcher, I find Deaton’s accusations against SEC Chairman Gary Gensler deeply concerning. The mounting evidence from reputable sources like Patrick McHenry and the XRP community raises serious questions about the SEC’s regulatory practices and the potential for misrepresentations and deceit within the agency.


As an experienced crypto investor and follower of XRP news, I can’t help but express my strong disagreement with SEC Chairman Gary Gensler based on John E. Deaton’s recent scathing criticism. According to Deaton, who is a well-known legal advocate for XRP, the chairman has compromised ethical standards and created an atmosphere of dishonesty at the US Securities and Exchange Commission (SEC).

Deaton’s accusations surfaced after McHenry, the Chairman of the House Financial Services Committee, claimed that Gensler had provided false information to Congress in his testimonies, specifically regarding the classification of Ether as a security. McHenry’s assertion underscores wider concerns about potential deceit and ambiguity from the SEC, which McHenry believes signifies an unsettling trend of “regulation through enforcement.”

As a legal analyst, I’ve reviewed recent court filings revealing allegations against SEC Chairman Gary Gensler. These documents suggest that during a Financial Committee hearing, Gensler may have provided misleading information regarding the classification of Ethereum (ETH) to Congress for regulatory oversight purposes.
Read my full statement
— Patrick McHenry (@PatrickMcHenry) April 30, 2024

Deaton Details Gensler’s ‘Bad Faith’

In his recent remarks on X, Deaton drew attention to his amicus brief in the Coinbase litigation, underscoring its importance in highlighting questionable regulatory practices by Gensler and the SEC. I, Deaton, strongly suggest that subpoenas be issued to Gary Gensler and the SEC. I urge everyone to review the Amicus Brief I submitted in the Coinbase case. There is a particular section in the brief that demonstrates Gensler’s behavior as inconsistent with good faith regulatory practices, potentially tainting the entire agency.

In their amicus brief, the accusers provide a description of alleged misconduct by Gensler, painting a picture of an SEC that manipulates legal outcomes to serve its own agenda, frequently sacrificing innovation and transparency in the process. Deaton points to several instances where federal judges have reproached the SEC for its relentless pursuit of victory.

In the related XRP lawsuit, I observed that the SEC’s approach in court was aimed at concealing undeniable facts. This tactic, which prioritizes winning over adhering to the law, is yet another illustration of the SEC shaping its legal positions to achieve its objectives rather than remaining faithful to the legal principles.

As a researcher, I’ve come across some intriguing comments from SEC Commissioner Hester Peirce. She expressed concerns about the current regulatory approach at the Securities and Exchange Commission (SEC). Specifically, she criticized the agency for inviting companies to engage in a lengthy and unproductive regulatory process that can be both difficult and labyrinthine in nature. According to Commissioner Peirce, this approach casts the SEC in a negative light and diminishes its effectiveness as a regulator.

In simpler terms, Deaton’s argument emphasizes the potential financial ruin and legal consequences that the SEC’s actions may bring. He cites the SEC’s alleged threat to drive companies into bankruptcy through litigation, a claim backed up by the founder of LBRY in an affidavit. According to court filings, this founder claimed that the SEC had privately made such a threat three years prior and that they had ultimately succeeded in achieving this outcome.

Additionally, the analysis carefully scrutinizes Gensler’s past remarks, as Deaton points out, revealing inconsistencies that suggest dishonesty on his part. Prior to joining the SEC, Gensler voiced worries over the absence of clear regulations in the digital asset sector.

As chairman, he has firmly stated during his August 3, 2021 speech at the Aspen Security Forum that the regulations regarding crypto assets are established and that the criteria for identifying whether a crypto asset is a security are unambiguous.

At the core of Deaton’s criticism are inconsistencies, implying a pattern of prioritizing regulatory outcomes over truth at the SEC. A note of caution is sounded in this document: such conduct not only harms the SEC’s reputation but also carries substantial consequences for the evolution of digital asset regulation in the United States.

XRP Lawyer Community Reacts

During the same event, other XRP community lawyers have taken issue with McHenry’s hollow remarks. Marc Fagel, a former securities lawyer, expressed his viewpoint, stating, “John, as a legal professional, you should recognize that McHenry’s statement is misleading. The SEC has not yet rendered a legal verdict on ETH, and GG did not provide false information during the hearing. You may hold strong opinions against him, but it’s essential to maintain accuracy in your statements.”

Fred Rispoli, the founder of HODL Law, expressed his concern regarding McHenry’s statement, saying, “Sir, with all due respect, could you please clarify how the Committee has held the SEC accountable for its regulatory overreach up until now?”

At press time, XRP traded at $0.4881.

Pro-XRP Lawyer Deaton Accuses SEC’s Gensler Of ‘Infecting’ Ethical Standards

Read More

2024-05-01 15:42