John Deaton has consistently criticized the SEC, advocating for regulatory changes in the crypto sector.
The US Securities and Exchange Commission (SEC) has ended the fiscal year with unprecedented financial settlements. Pro-XRP attorney John Deaton is drawing attention to SEC Chair Gary Gensler‘s contentious connections to FTX founder Sam Bankman-Fried. Deaton’s recent comments are prompting scrutiny of the SEC’s regulatory strategy, particularly its interactions with the now-defunct crypto platform and its previous chief executive.
SEC Chair Criticized for Favoring Bankman-Fried
In a recent post on X, John Deaton recently criticized SEC Chair Gary Gensler for favoring Sam Bankman-Fried while excluding prominent US crypto leaders like Coinbase’s Brian Armstrong and Kraken’s Jesse Powell. Deaton, a long-time critic of SEC practices, views Gensler’s actions as evidence of bias. Preferential access for Bankman-Fried, despite ongoing scrutiny of the SEC’s crypto oversight, highlights potential inconsistencies in regulatory treatment.
Deaton also raised concerns over Bankman-Fried’s $10 million in political donations, suggesting financial influence may have secured FTX a privileged role in regulatory talks. This access, denied to other US-based crypto firms, has intensified doubts about the SEC’s impartiality.
As debates over Gensler’s relationship with Bankman-Fried continue, the SEC announced a record $8.2 billion in financial remedies for fiscal year 2024. Yet, enforcement actions have decreased by 26% from the previous year, with 583 cases, including 431 standalone actions – a 14% drop from 2023.
A significant portion of financial recoveries, $4.6 billion, resulted from the SEC’s case against Terraform Labs and its founder Do Kwon, contributing to the commission’s record year. However, the decline in enforcement activity raises questions about the agency’s regulatory effectiveness amid increasing scrutiny of its crypto oversight.
Deaton Calls for Regulatory Reform
John Deaton has consistently criticized the SEC, advocating for regulatory changes in the crypto sector. He argues that the SEC’s dependence on outdated regulations is hindering progress in blockchain technology. Recently, he intensified his call for a modernized and transparent regulatory framework to tackle challenges associated with blockchain and cryptocurrency.
Deaton’s concerns arise as SEC Chair Gary Gensler prepares to leave office on January 20, 2025. Gensler’s planned departure, confirmed by a press release and a post on X, aligns with Donald Trump’s upcoming inauguration as the 47th US President. Gensler’s tenure at the SEC has been marked by controversy and evolving regulatory stances, particularly in the realm of cryptocurrency.
Amid the anticipated leadership change, Deaton has endorsed Brad Bondi as a suitable successor. Bondi, with a background in legal and regulatory reform, is seen by Deaton as a candidate capable of providing the clarity and balanced oversight necessary for the growth of the crypto sector. Deaton emphasizes the need for new leadership at the SEC to encourage a more open and progressive regulatory approach.
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