It looks like altcoin projects won’t be able to get out of trouble with the SEC. The famous US lawyer fears that the SEC might classify ETH as a security after Ethereum Merge. John Deaton suggests that the SEC may go after ETH once Ethereum Merge begins.
Lawyer Deaton fears for leading altcoin
The hours started to count down for Ethereum Merge, which the crypto money market is eagerly waiting for. Attorney John Deaton, the founder of CryptoLaw, expressed the possibility that Ethereum will face SEC trouble after Merge. Deaton voices his fears over the SEC’s possibility to classify Ethereum (ETH) as a security after the Merge upgrade is released.
John Deaton cites a comment made by SEC Chairman Gary Gensler in a tweet. Based on this, he makes his claim. The head of the SEC said that Bitcoin is the only crypto asset that is comfortably not a security. The statement also suggested that Gensler was not willing to classify ETH as a non-security, despite early comment by William Hinman in a 2018 speech.
Meanwhile, William Hinman continues to cause controversy. “Based on my understanding of the current state of Ethereum, the Ethereum network and its decentralized nature, current offerings and sales of ETH are not securities transactions,” Hinman said in a 2018 speech. Evaluating the latest comment made by the SEC Chair, attorney Deaton said:
Recently, Gensler said that he is comfortable just declaring Bitcoin a commodity. This literally means that despite what William Hinman said in 2018, he is uncomfortable and reluctant to declare ETH a commodity, and therefore a non-security.
Deaton is worried that Gensler claims that the upcoming Ethereum Merge is making ETH a security. As such, he expresses fears that Gensler will suggest that ETH is repackaging. Thus, allowing ETH to claim to be a security is consistent with Hinman’s November 2018 comment.
I hope you and @ethereumJoseph @ethereum and @ConsenSys are confident that my fear is misplaced. I also hope you don’t believe I somehow lost my right to be protected from SEC overreach, like I have as an #XRPHolder.
— John E Deaton (214K Followers Beware Imposters) (@JohnEDeaton1) September 12, 2022
“Of course, with Gensler doubling the SEC dedicated staff to crypto enforcement, opening new offices dedicated to crypto, silencing the old SEC crypto Czar and now targeting exchanges, it would be wise to end the split,” Deaton adds.
Crypto investors have lost confidence in the SEC
John Deaton’s fear comes after the ongoing litigation between Ripple and the SEC. The developments and events in the case have placed an unpleasant picture of the SEC in the minds of the crypto community. The SEC has yet to provide clear regulatory guidelines for the emerging market. Also, many accuse the SEC of preferring to regulate it with sanctions tactics rather than regulation by rules.
Deaton has been among those who continue to speak out against the SEC’s regulatory approach to the crypto space. As you follow on Kriptokoin.com, the founder of CryptoLaw said that the SEC’s rejection of 16 Bitcoin ETF applications was mostly influenced by the political agenda.
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