XRP Lawyer Deaton Slams Gensler for Lack of Clarity on Crypto Laws, Demands Resignation

Gary Gensler, the Chair of the U.S. Securities and Exchange Commission (SEC), recently faced public backlash for avoiding crucial questions during his appearance before the U.S. House of Financial Services Committee.

The criticism is growing, the dissent is boiling, and people are angry. Will Gensler be forced to resign? Let’s explore Deaton’s thoughts.

Deaton Doesn’t Hold Back

John Deaton, a lawyer representing Ripple’s XRP holders, expressed his strong disapproval of Gensler’s conduct on social media. He demanded that Gensler step down from his position.

Deaton dismissed Gensler’s academic credentials, stating that he doesn’t care whether Gensler taught at MIT (Massachusetts Institute of Technology) or not, as he believes Gensler lacks a basic understanding of what constitutes an investment contract or security.

Deaton highlighted one of Gensler’s contentious arguments about securities. Gensler asserts that promoting an asset automatically categorizes it as a security, a claim that Deaton strongly opposes.

Deaton pointed out that this view overlooks the fact that assets acquired for purposes other than investment are exempt from U.S. securities regulations.

Is Gensler Ignoring the Law?

In addition to his criticisms, Deaton accused Gensler and the SEC of disregarding the law, established legal tests, and court rulings.

“More importantly, he doesn’t give a shit what the law says. The SEC has publicly admitted that it ignores the common enterprise factor of the Howey test. It’s on the @SECGov website today.” 

A Cry for Change

The growing number of crypto lawsuits filed by the SEC in the US demands the crypto regulatory system be improved as soon as possible. 

Gensler’s perspective on securities revolves around the idea that any asset promoted as an investment opportunity should fall under securities regulations. However, it is crucial to emphasize that U.S. securities regulations provide exemptions for assets acquired for non-investment purposes, recognizing the distinction between investment and utility tokens.

Gensler faces strong opposition

Deaton argues that Gensler’s lack of understanding regarding investment contracts or securities is evident in his handling of the Ripple case. He believes that Gensler’s continued presence in office threatens the fair treatment of not only XRP holders but also the whole crypto community in the US; thereby, he calls for his immediate resignation.

Read More: SEC Chair Gensler Mocks Crypto Industry With Fraud Allegations; Ripple CLO Responds