Prominent pro-XRP lawyer John Deaton has launched a scathing critique of the US Securities and Exchange Commission (SEC) in light of the regulatory body’s actions against blockchain company LBRY Inc. Deaton, renowned for representing XRP holders in the Ripple-SEC lawsuit, marked the regulatory body’s conduct as an exhibit of overreach.
“The LBRY case should be taught in law schools across the country,” Deaton asserted on X (formerly Twitter), emphasizing its significance not just in applying “the Howey Test to modern-day blockchain technologies and crypto,” but also as a “specific highlight [of] SEC overreach.”
Pro-XRP Lawyer Deaton Slams SEC
Elaborating further on his stance, Deaton criticized the SEC’s choice to pursue LBRY Inc., a relatively smaller entity, despite there being larger, more questionable activities to scrutinize within the crypto sector. He remarked that the regulatory body “picked a small American Company based out of New Hampshire, threatened to bankrupt it during the investigation, and then proceeded to bankrupt it – in a case where no fraud or misrepresentation occurred.”
Meanwhile, the US Securities and Exchange Commission (SEC) has seemingly turned a blind eye to the real scammers in the crypto ecosystem. Deaton cites “FTX, Celsius Network, Voyager, Luna, Genesis, [other] pump and dumps” as potential targets for the US agency that it could have investigated and stopped to protect US retail investors. Instead, all of these companies caused a massive amount of damage.
Deaton’s tweet came in response to an announcement by LBRY Inc. Marked by a tone of resignation, they unveiled their decision to cease operations amidst unsustainable debts and continuous challenges posed by the SEC. The firm was initially slapped with a $22 million fine, which was later mitigated to $111,000 by the SEC, in cognizance of LBRY’s financial duress.
Following this, the company withdrew its appeal against the SEC and commenced its wind-down procedures, with all executives, employees, and board members tendering their resignations.
Commenting on the LBRY case’s broader implications, Deaton highlighted the expenditure of “millions of dollars” resulting in a $130,000 fine, painting a picture of inefficiency and failure on the part of the SEC.
His condemnation didn’t just pertain to the financial aspects but extended towards the regulatory approach and discernment exercised by the SEC in choosing its battles within the crypto landscape:
After millions of dollars were wasted, the SEC got a $130K fine. This case alone proves the SEC is a broken, failed and inept agency.
Remarkably, the conclusion of LBRY’s journey has elicited a mixture of disappointment and resilience from the crypto community. Despite the unfolding adversities, community members have conveyed their willingness to sustain LBRY’s open-source blockchain network, Odysee, showcasing the persistent spirit of the decentralized ethos.
At press time, XRP was trading at $ and eyed a daily above the 200-day EMA ($0.5172)
Featured image from Crypto Economy, chart from TradingView.com