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Pro-Ripple Lawyer Says SEC Used Ripple's Transparency Against It and Brad Garlinghouse

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Mon, 10/07/2023 - 10:35
Pro-Ripple Lawyer Says SEC Used Ripple's Transparency Against It and Brad Garlinghouse
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Founder of Crypto-Law.US, lawyer John Deaton, who is a well-known Ripple supporter, has taken to Twitter to take another jab at the SEC and the unregulated environment for crypto companies that it has provided so far.

He commented on a Twitter post issued by @lex_node about "KYC-ish crypto things" that are necessary to "truly access system security/centralization."

The user tweeted he believes that big token holders must be forced to identify themselves, as well as the total percentages of the token supply they own or control directly or indirectly — "like 13D-style."

Deaton agreed to that, stating that this could only be possible "in a sane regulatory environment."

SEC takes advantage of Ripple's transparency, per Deaton

The Crypto.Law founder, who closely follows the Ripple-SEC case, tweeted that the U.S. securities regulator has taken advantage of the transparency taken on by Ripple Labs when they implemented the cryptographic escrow and began to release reports regarding XRP sales on a quarterly basis.

The SEC, he insists, has used this transparency against Ripple and its CEO, Brad Garlinghouse. He added something else, revealing an interesting fact about the speech by Hinman — the former director of the Corporation Finance division — made in 2018 and related to crypto assets and whether they qualify as securities, as the SEC's chairman Gensler insists now.

Citing the above-mentioned tweet by @lex_node, Deaton said that in his famous speech, Hinman was asked whether he and the SEC had managed to find out exactly how many Ether tokens Ethereum co-founders Joseph Lubin and Vitalik Buterin held in 2018.

Hinman testified that the SEC did have that information; however, he "could not remember the numbers or percentages regarding token ownership."

Related
Major XRP Fan Says He Will Buy Tesla's Cybertruck After Elon Musk's New Tweet

Ethereum could be a security, Gensler hits, same as XRP

The role of Ethereum in the current SEC process against Ripple is notable since the securities agency in 2018 declared both Bitcoin and Ethereum to be commodities, which makes them free from any attacks from the securities regulator now, unlike Ripple-affiliated token XRP.

However, in February of this year, as covered by U.Today, SEC boss Gary Gensler hinted that he believes Ethereum could indeed be classified as a security. The criteria here is that, Gensler stated, all cryptocurrencies, apart from BTC, were created by a group of developers who promote their own tokens. This makes them digital securities, according to Gensler.

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