Attorney and U.S. Senate candidate John Deaton has raised concerns about the Securities and Exchange Commission's (SEC) aggressive regulatory stance on cryptocurrencies, alleging that it has resulted in substantial financial losses for small investors. Deaton, who has represented thousands of XRP holders in legal battles, claimed that the SEC's actions have led to over $15 billion in losses for retail investors.
SEC Faces Scrutiny for its Aggressive Regulatory Stance
Deaton's criticism comes amid mounting scrutiny of the SEC for its tough approach to regulating the crypto industry. As the Republican nominee for the U.S. Senate in Massachusetts, Deaton intends to challenge Democratic Senator Elizabeth Warren in the upcoming November election.
He emphasized his commitment to holding the SEC accountable, especially given what he perceives as Senator Warren's reluctance to do so. Deaton has been vocal about the need for clarity in the SEC's regulation of cryptocurrencies, citing inconsistencies in the agency's actions and its failure to provide clear guidance on assets like XRP.
In a surprising shift, the SEC recently updated its stance on cryptocurrencies, acknowledging that it no longer considers cryptocurrencies themselves as securities. This change was reflected in a court filing related to a case involving binance, marking a departure from the SEC's previous classification of assets like XRP as securities.
Deaton has long advocated for the SEC to clarify its approach to regulating cryptocurrencies and has been critical of the agency's lack of consistency. He pointed out the extended legal battle over XRP as a prime example of the SEC's refusal to provide clear guidance on the classification of digital assets.
SEC Settles with eToro
Meanwhile, the SEC recently reached a settlement with trading platform eToro, requiring its U.S. operations to cease trading in nearly all crypto assets and imposing a $1.5 million fine. This settlement is part of the SEC's heightened enforcement efforts in 2024, as indicated by a significant increase in monetary enforcement actions against crypto firms compared to the previous year.
According to a report from Social Capital Markets, the SEC's total monetary enforcement actions against crypto companies in 2024 amounted to $4.7 billion, a substantial surge from the previous year. The largest enforcement action came in June, with a $4.47 billion settlement with Terraform Labs and its former CEO, Do Kwon, representing the SEC's most significant crypto enforcement to date.
Recently, a coalition of seven U.S. states came together to challenge the SEC's cryptocurrency regulations, arguing that the agency's oversight could stifle innovation, harm the industry, and overstep its authority. Led by Iowa Attorney General Brenna Bird, the states filed an amicus brief to contest the SEC's regulatory approach to cryptocurrencies.
