John E. Deaton, a pro-Ripple (XRP) lawyer, reported that US regulators began to scrutinize a well-established altcoin project after XRP.
US regulators are after this altcoin project, not XRP anymore
Legal expert John Deaton reports that US regulators targeted another altcoin listed on KuCoin to accuse him of selling unregistered securities. Although XRP is traded on KuCoin, regulators are now more interested in Ethereum (ETH).
According to Deaton, this trend was not accidental. Allegedly, regulators want to terminate all stakeable altcoins. In particular, the New York Attorney General (NYAG) is first targeting Ethereum to restrict projects that involve such staking. As Kriptokoin.com, we have stated that one of the altcoins listed in the KuCoin case is Ethereum.
[DB] Crypto Exchange Kucoin Sued in New York’s Crackdown on Industry: BBG
— db (@tier10k) March 9, 2023
Altcoin investors counterattack
Legal expert John Deaton had previously organized a group of Ethereum investors to file a class action lawsuit against the New York state attorney general. More than a thousand complainants have already joined the lawsuit, but there are currently insufficient participants directly from that state. Alongside ETH investors, KuCoin has also sued the NYAG. “Judges will now have to try the SEC,” Deaton says…
#ETHEREUM IS NOT A SECURITY CLASS ACTION https://t.co/EjsD0ZHwOG
— John E Deaton (@JohnEDeaton1) March 10, 2023
SEC could be in trouble
Attorney John E. Deaton claimed that judges will have a hard time defending the SEC’s lack of adherence to the law, excessive access and inconsistent statements in crypto enforcement actions. Deaton’s comments came in response to a Twitter thread highlighting a recent decision by Coinbase’s Chief Legal Officer Paul Grewal regarding the Voyager bankruptcy case.
In the ruling, Judge Michael E. Wiles accused regulators of fueling uncertainty in the nascent market. Judge Wiles scolded regulators for failing to establish clear rules for the nascent market and constantly struggling for control, further adding to market uncertainty.
As I said in @CryptoLawUS’s livestream, the SEC is losing in Court. The truth is, the SEC does not have the law on its side. Then when you couple the SEC’s overreach along with its inconsistent statements and behavior, Judges will be forced to call the SEC out. https://t.co/T1ImMG19fV
— John E Deaton (@JohnEDeaton1) March 15, 2023
“If the current regulatory environment can be characterized as uncertain, the future regulatory environment, I think, can only be characterized as almost unknowable,” the judge predicts. Responding to the issue, Deaton claims that the regulator lost in court. According to Deaton, the law is not on the SEC’s side.
SEC found wrong in 3 lawsuits
It’s worth noting that the regulator has suffered several losses in court in recent weeks. As Ripple’s CEO Brad Garlinghouse highlighted last week, the SEC only suffered losses in resolutions in three separate cases earlier last week.
As reiterated by Deaton recently, Judge Sarah Netburn urged the SEC in the Ripple case last July to “adopt litigation positions to advance the desired goal, not just a staunch adherence to the law.”
cryptocurrency, and on the other hand, that Hinman sought and obtained legal advice from SEC counsel in drafting his Speech, suggests that the SEC is adopting its litigation positions to further its desired goal, and not out of a faithful allegiance to the law.”
-Judge Netburn
— John E Deaton (@JohnEDeaton1) February 20, 2023
This year, the SEC stepped up its crypto enforcement efforts, following Gemini, Genesis, Kraken, and Paxos in two months. Meanwhile, as highlighted in a recent report, the regulator appears to have no immediate plans to curb crypto enforcement efforts, as FOX Business reporter Eleanor Terrett revealed the SEC’s emphasis on crypto enforcement in its latest budget proposal.
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