John Deaton, an attorney representing the amici status and 72,000 XRP holders, has called out Gary Gensler, President Joe Biden’s elect run an agency intended to focus on stock scammers ripping off the unsuspecting for pock-nosing into crypto while neglecting his duty.
In a Fox Business opinion piece filed by John Deaton on the 21st of August, the SEC called out to the attorney John for extending its tentacle beyond the limit of its constitution in fighting crypto.
Deaton accused Gensler of his attempt to turn the decades of securities law and laid down principles.
Deaton Responding to Gensler’s Statement
It is worth noting that the attorney Deaton is responding to Gensler’s statement in a wall street journal Opinion piece there is no special treatment for the crypto market.
Per John Deaton, barring congressional action, the fundamental regulator of the crypto market should be the commodity futures trading commission which monitors investments that cannot be grouped as traditional securities.
Howbeit, amici’s status attorney accuses the SEC of taking advantage of no clear crypto rules from Congress to initiate a campaign of regulation by enforcement.
According to Deaton, the SEC makes use of the extending Howey test to achieve the action.
Facts about Howey test.
It is a securities standard created by a supreme court ruling in 1946. Attorney John revealed that the Howey Test holds that an investment contract occurs when a person:
- Invests money
- In a common enterprise
- Is led to expect profits
- solely from the efforts of the promoter or a third party.
Gensler uses a lack of complete understanding to launch a campaign of regulation by enforcement by stretching the Howey beyond the limit. Gensler’s perception of crypto is not only an opportunity to regulate how the land and service contracts were sold but an opportunity to regulate the oranges.
As stated earlier, John Deaton said SEC had lost watch of its fundamental role and territory in its quest to forcefully regulate crypto. As stated by the attorney Deaton, there is a rise in meme stocks which are luring novice investors and Special Acquisition Companies (SPACs) are crashing, all of these are no issue of concern for the SEC.
It is worth noting that Deaton has once alerted SEC for neglecting the matter of investors’ protection in its cases against Ripple and its token.
According to a Fox Business piece, Gensler’s war against crypto may be his ultimate ambition as he has leverage in the absence of congressional action to enforce regulation on crypto space by changing years of legal precedent.