John Deaton has pressed the SEC for crypto regulation and criticized Gary Gensler for favoring Sam Bankman-Fried.
The fiscal year has concluded with unprecedented financial settlements by the Securities and Exchange Commission (SEC) of the United States. John Deaton, an attorney who advocates for XRP, highlights the contentious connections between SEC Chair Gary Gensler and FTX founder Sam Bankman-Fried. The SEC’s regulatory strategy, particularly its interactions with the now-defunct crypto platform and its previous chief executive, are being scrutinized in response to Deaton’s recent comments.
The SEC Chair has been criticized for favoring Bankman-Fried
In a recent post on X, John Deaton criticized SEC Chair Gary Gensler for favoring Sam Bankman-Fried while excluding prominent US crypto leaders such as Brian Armstrong of Coinbase and Jesse Powell of Kraken. Deaton, a long-standing critic of SEC practices, regards Gensler’s actions as evidence of bias. Bankman-Fried’s preferential access, despite the ongoing scrutiny of the SEC’s crypto oversight, underscores potential inconsistencies in regulatory treatment.
Deaton also expressed apprehension regarding Bankman-Fried’s $10 million in political donations, implying that financial influence may have granted FTX a privileged position in regulatory negotiations. This access, denied to other US-based crypto firms, has exacerbated concerns regarding the SEC’s impartiality.
The SEC has announced a record $8.2 billion in financial remedies for fiscal year 2024, as discussions regarding Gensler’s relationship with Bankman-Fried persist. However, enforcement actions have decreased by 26% from the previous year, with 583 cases, including 431 standalone actions–a 14% decrease from 2023.
The SEC’s case against Terraform Labs and its founder, Do Kwon, was responsible for a substantial portion of financial recoveries, totaling $4.6 billion, contributing to the commission’s record-breaking year. Nevertheless, the agency’s regulatory effectiveness is called into question by the decrease in enforcement activity, which coincides with the heightened scrutiny of its crypto oversight.
Deaton Advocates for Regulatory Reform
John Deaton has consistently criticized the SEC, advocating for regulatory changes in the crypto sector. He contends that the SEC’s reliance on antiquated regulations is impeding the advancement of blockchain technology. He has recently heightened his advocacy for a transparent and modern regulatory framework to address the obstacles associated with cryptocurrency and blockchain.
Deaton’s concerns are exacerbated by the fact that SEC Chair Gary Gensler is preparing to vacate the office on January 20, 2025. Gensler’s forthcoming departure, verified by a press release and a post on X, corresponds with Donald Trump’s upcoming inauguration as the 47th President of the United States. Gensler’s tenure at the SEC has been characterized by controversy and the development of regulatory stances, particularly in cryptocurrency.
Deaton has recommended Brad Bondi as an appropriate successor in light of the forthcoming leadership transition. Deaton regards Bondi, who has experience in legal and regulatory reform, as a candidate who can offer the balanced oversight and clarity essential for the crypto sector’s expansion. Deaton underscores the necessity of new leadership at the SEC to promote a more progressive and transparent regulatory approach.
