John Deaton, a pro-crypto attorney and Republican US Senate candidate, has vehemently criticized the Securities and Exchange Commission (SEC) for what he describes as excessive intervention in the cryptocurrency market, resulting in significant financial losses for retail investors. Deaton claims that the SEC’s aggressive regulatory actions have caused a staggering loss of over $15 billion for investors.
“The SEC’s misconduct and gross overreach caused small investors over $15 billion. On behalf of those 75K small investors I represented, we do not accept the SEC’s apology,” Deaton asserted in a recent post on X.
Deaton’s critique extends to the lack of action from other political figures, notably pointing out that Senator Elizabeth Warren has not taken steps to address these issues, a point of contention he plans to challenge as he runs against her in the upcoming Senate race in Massachusetts.
This development coincides with a notable shift in the SEC’s approach to cryptocurrencies. A recent court filing revealed a departure from the SEC’s previous assertions that cryptocurrencies are securities. This filing included an apology for any confusion caused by their prior statements: “The SEC regrets any confusion it may have invited” by falsely and repeatedly stating that tokens themselves are securities.”
This change is seen as a significant turn, especially as the SEC has previously maintained that tokens like XRP were considered securities. Deaton commented on the inconsistency, expressing frustration over the SEC’s refusal to clarify the legal status of the XRP token: “All I asked, was for the SEC to honor the law and make clear that the token itself (XRP) was NOT the security. The lawyers at the SEC not only refused to do so, but they attacked me personally.”
The SEC’s regulatory stance has led to substantial enforcement actions, with the agency imposing nearly $4.7 billion in penalties against various crypto firms and executives by September 2024, marking an increase of over 3,000% from the previous year. This aggressive enforcement comes as the SEC navigates the complex and evolving landscape of cryptocurrency regulation.
