John Deaton Raises Concerns Over Security Status of Bitcoin, Ethereum, and Ripple Amid Introduction of Fresh Cryptocurrency Regulations
At the start of the week, the cryptocurrency industry is grappling with discussions surrounding crypto risk and the urgent need for crypto regulations. A prominent supporter of XRP, John E. Deaton, has entered the conversation about new crypto laws, which have received a boost from Treasury Secretary Janet Yellen. Deaton argues that Bitcoin, Ethereum, and XRP should not be classified as securities, and he provides his reasons for this stance.
In response to Yellen’s push for crypto legislation in the US, Deaton has defended Bitcoin, Ethereum, and Ripple’s XRP against claims of being securities. He points to recent developments, such as the approval of spot Bitcoin ETFs by the SEC, as evidence of Bitcoin’s legitimacy. Similarly, the approval of futures ETFs for Ethereum and BlackRock’s application for a spot Ethereum ETF indicate Ethereum’s non-security status. Deaton also highlights a ruling by Judge Analisa Torres, which states that XRP offered to retail investors is not a security, further solidifying XRP’s position.
The ongoing Coinbase lawsuit with the SEC now takes center stage, as the security status of BTC, ETH, and XRP has been clarified. The outcome of this lawsuit could have significant implications for future crypto legislation.
While Deaton defends the legitimacy of these cryptocurrencies, Treasury Secretary Janet Yellen warns of broader crypto risks. Yellen compares the FTX case to the Lehman Brothers crisis and urges Congress to strengthen existing regulations and implement new ones, particularly for stablecoins and non-security crypto-assets.
Meanwhile, the European Union is also preparing to establish clear crypto rules. The European Securities and Markets Authority seeks public input on standards under the Markets in Crypto-Assets regulation, which aims to set strict rules for foreign crypto firms operating in the EU.
Yellen’s recent remarks have prompted the SEC to unveil a 247-page rule book aimed at ensuring the safety of crypto investors. These rules focus on decentralized finance and liquidity providers, mandating compliance with federal laws for those involved in crypto transactions. However, there is discontent within the crypto community, with critics arguing that these rules may stifle innovation in the DeFi space. Commissioner Hester Peirce has raised questions about the compatibility of these rules with automated market makers, sparking a heated debate on striking a balance between crypto safety and fostering new ideas.