John Deaton, a well-known crypto lawyer, said that regulatory actions against the crypto industry point to a significant government overreach and intrusion into the private sector.
Deaton made the statement on social media on Jan. 22, where he specifically called out the actions of various federal agencies, including the SEC, FBI, EPA, and the Federal Reserve — likening their operations to an Orwellian ‘Big Brother’ scenario.
His comments reflect a growing sentiment within the cryptocurrency community about the balance between regulation and financial liberty.
Ripple lawsuit
Deaton’s criticism was particularly pointed towards the SEC’s lawsuit against Ripple Labs Inc., CEO Brad Garlinghouse, and co-founder Chris Larsen. Initiated in December 2020, the lawsuit accused Ripple of conducting an unregistered securities offering through the sale of XRP.
He criticized the SEC’s broad classification of XRP tokens as illegal securities, suggesting it was an unconstitutional expansion of the watchdog’s authority. Deaton added that the dismissal of charges against Brad Garlinghouse and Chris Larsen demonstrates the regulator’s misuse of its power.
Deaton also pointed out that before the lawsuit, major players like Coinbase and MoneyGram had conducted due diligence on XRP without any objections from the SEC, which indicates a lack of clarity and consistency in the regulator’s approach toward cryptocurrencies.
The recent developments in the case bolster his argument. Judge Analisa Torres partially ruled in favor of Ripple Labs, determining that XRP sales on digital asset exchanges do not constitute a security.
Deaton has suggested that the lawsuit was used as a weapon against Ripple, a stance he has maintained since filing a Writ of Mandamus against the SEC shortly after the lawsuit was announced.
Attack on financial freedom
Deaton, who has initiated legal action against the SEC on behalf of XRP investors, users, and developers, explained that his lawsuit was motivated by the broader implications of the SEC’s actions rather than personal financial interest.
He stated that his holdings in XRP are minimal compared to other investments like Bitcoin and Ethereum. For Deaton and 75,000 others, the lawsuit represents an assault on a crucial liberty: financial freedom. He argued that in America, people should have the autonomy to own legal assets beneficial to their lives without government interference.
The attorney also criticized the Accredited Investor Rule, viewing it as a tool for the elite to restrict financial mobility for the majority of the population. He said the rule is a mechanism to maintain dependency on the government and restrict access to financial opportunities.