Lawyer Accuses SEC Chair of 'Gaslighting' Public in Coinbase Case

Background

In the legal battle between Coinbase Global Inc. and the U.S. Securities and Exchange Commission (SEC), John Deaton, the lawyer representing XRP holders, has accused SEC Chair Gary Gensler of misleading the public and disagreed with his stance on cryptocurrencies.

SEC Rejects Coinbase's Petition

The SEC recently rejected Coinbase's rulemaking request, citing three reasons. These reasons include the application of current securities laws to cryptocurrencies, the SEC's engagement with the crypto securities markets through rulemaking, and the importance of preserving the Commission's discretion in setting its rulemaking priorities.

Lawyer's Response

In response to the SEC Chair's letter, John Deaton argued that there is nothing unique or new about cryptocurrencies and that Coinbase's rulemaking request is based on the belief that the crypto ecosystem is distinct in terms of asset volatility and the categorization of all assets as securities under current laws. This contradicts Gary Gensler's previous statements during congressional testimony, where he acknowledged the unique nature of crypto and the regulatory gap it presents.

Political Motives

Deaton accused the SEC Chair of reversing his stance on crypto due to political motives and support from Senator Elizabeth Warren. He pointed out the inconsistency between the SEC's previous communications and its current position.

SEC's Mixed Signals

The SEC has been sending mixed signals about its position in the cryptocurrency ecosystem. While it continues its legal disputes with Coinbase and Binance over crypto securities, the regulatory body chose not to appeal its defeat against Grayscale Investments in a case involving the transformation of its Bitcoin Trust into an operational spot Exchange Traded Fund (ETF).