Lawyer John Deaton, representing XRP holders, criticized SEC Chairman Gary Gensler, alleging that he misled the public and disagreed with his cryptocurrency stance amid the ongoing legal dispute between Coinbase and the SEC.
In response to Coinbase’s rulemaking request denial, the SEC provided three justifications, emphasizing the application of existing securities laws to cryptocurrencies, the SEC’s role in crypto securities market engagement through rulemaking, and preserving the Commission’s discretion in setting rulemaking priorities.
John Deaton challenged the SEC’s arguments, highlighting that crypto currency lacks uniqueness and emphasizing Coinbase’s belief in the crypto ecosystem’s distinctiveness from traditional markets.
Additionally, Deaton asserted that this contradicts SEC Chairman Gary Gensler’s earlier congressional testimony, where he mentioned the uniqueness of the crypto industry and the regulatory gap it creates.
Highlighting Coinbase’s alignment with SEC statements, Deaton claimed Gensler’s reversal on crypto regulation is politically motivated with support from Senator Elizabeth Warren.
The SEC’s stance on the cryptocurrency ecosystem appears inconsistent, with signals emanating from both the statements of the SEC Chairman and the commission’s actions in general.
However, amid ongoing legal conflicts involving Coinbase and Binance regarding crypto securities, the regulatory body chose not to pursue an appeal after facing a setback in its case against Grayscale Investments.
Grayscale’s case revolves around its efforts to transform its Bitcoin Trust into an operational spot exchange-traded fund (ETF).
The crypto industry’s ongoing conflict with the SEC includes various legal disputes, with the SEC consistently asserting jurisdiction over most crypto tokens, considering them securities.
In 2022, Coinbase formally requested the SEC to establish a tailored regulatory framework for the crypto industry, contending that existing securities laws are inadequate for this emerging asset class. In April, the company filed a lawsuit, asking a judge to compel the SEC to respond to its petition.
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