Attorney Deaton has expressed support for Coinbase’s Chief Legal Officer, who suggested that the legal battle between Coinbase and the SEC is not just about the exchange but rather an attack against the entire cryptocurrency industry. Deaton agrees with the idea that the SEC’s actions against Coinbase could have far-reaching implications for the entire crypto market.
The attorney took to Twitter to express his agreement with Coinbase’s Chief Legal Officer, Paul Grewal, who stated that the Wells notice received by Coinbase from the SEC is not just an attack on Coinbase alone but rather a direct hit against the entire cryptocurrency industry. Deaton shares Grewal’s perspective that the SEC’s actions towards Coinbase could have wider implications for the entire crypto market.
During his appearance on the Unchained Crypto podcast hosted by Laura Shin, Coinbase’s Chief Legal Officer, Paul Grewal, observed if the SEC could pursue legal action against a publicly-traded company like Coinbase, then it means that no one in the cryptocurrency industry is safe from regulatory scrutiny.
According to Grewal, the SEC’s actions against Coinbase could set a precedent that other regulatory bodies worldwide could follow, potentially leading to a more significant impact on the entire crypto industry.
Grewal further stated:
“[…] This is not just a fight for Coinbase. This is a fight for all of the crypto [because] if responsible actors with serious AML and KYC programs, publicly listed that are filing petitions for rulemaking and attempting to engage with the government can be treated in this fashion, nobody else is safe either,“
Read article: Could Coinbase Have a Stronger Fair Notice Defense Than Ripple?
After Paul Grewal’s appearance on the Unchained Crypto podcast, there was a series of responses from members of the XRP community who felt that Grewal’s statement was overdue.
Deaton Expresses his Opinion
Although some XRP holders have expressed their opinion that Paul Grewal’s comments regarding the Wells notice received by Coinbase are belated, the Cryptolaw founder holds a different perspective. Deaton acknowledges that many XRP holders feel that Grewal’s comments are coming too late, particularly in light of Coinbase’s decision to delist XRP from its platform two years ago due to regulatory concerns.
However, Deaton still supports Grewal’s assertion that the SEC’s actions against Coinbase have broader implications for the entire crypto industry.
According to attorney John Deaton, XRP and Ripple were used as regulatory sacrifices to set an example for other cryptocurrencies. He believes that Coinbase had played a role in promoting the use of XRP for cross-border settlements, and in January 2019, the exchange presented a report to the SEC, claiming that XRP was not a security. Subsequently, in February 2019, Coinbase listed XRP on its platform.
However, despite Coinbase’s position, the SEC ultimately took legal action against Ripple and XRP, which Deaton believes was a move to send a message to other cryptocurrencies and companies operating in the crypto space.
According to the founder of CryptoLaw, Coinbase would not have listed XRP if the SEC had indicated that the cryptocurrency was a security. This is because Coinbase needed the SEC’s approval to go public, and listing a security without proper regulatory clearance could have jeopardized Coinbase’s ability to operate as a publicly-traded company.
“I know how XRP Holders feel about the delisting. At the time, I publicly disagreed with Coinbase for delisting it, but the sad reality is delisting XRP was probably not a very difficult choice for Coinbase to make considering it sought approval for an IPO and wanted harmony with SEC,” attorney Deaton noted.
Morgan Replies Deaton
In response to John Deaton’s tweets about XRP and Coinbase, Bill Morgan, a pro-XRP lawyer, acknowledged that he understood why Coinbase had delisted XRP from its platform. Furthermore, Morgan noted that Coinbase had not supported Ripple during the company’s legal battle with the SEC. Morgan’s perspective is that Coinbase’s lack of support for Ripple may have contributed to the current regulatory climate for cryptocurrencies and companies in the crypto space.
Read more: Is the SEC Adjusting its Position on XRP Classification as a Security?
Bill has suggested that Coinbase would have stood by its initial decision that XRP was not a security. However, he believes Coinbase chose not to jeopardize its relationship with the SEC due to the company’s plans to go public.
https://twitter.com/Belisarius2020/status/1640164676343590915?s=20
It is important to note that not all members of the XRP community are angry with Coinbase. When Coinbase received a Wells notice from the SEC, Ripple’s Chief Legal Officer, Stuart Alderoty, tweeted an old proverbial expression: “the enemy of my enemy is my friend.”
