Coinbase and the United States Securities and Exchange Commission (SEC) are embroiled in an ongoing legal battle, and now the lawyer representing XRP holders, John Deaton, has accused SEC Chair Gary Gensler of “gaslighting” the American people.
The latest development in Coinbase’s request for rulemaking came when the SEC denied the trading platform’s petition on three grounds. One of these grounds was that existing securities laws apply to cryptocurrencies and that the SEC addresses the crypto securities markets through rulemaking.
However, Deaton argues that there is nothing unique or new about cryptocurrencies, directly contradicting Gensler’s previous testimony to Congress, where he stated that crypto falls outside the purview of the SEC due to its unique nature and regulatory gap.
Deaton believes that Gensler’s change in position is politically motivated, with support from Senator Elizabeth Warren. He sees this as a significant shift from the SEC’s previous stance on crypto.
The SEC’s position on the cryptocurrency industry has been inconsistent, with different signals emanating from the SEC Chairman’s statements and the actions of the commission. While the SEC is engaged in a lawsuit with Coinbase and Binance over crypto securities trading, it refused to file a petition in its battle with Grayscale Investments over the conversion of its Bitcoin Trust to an ETF product.
This inconsistency is causing uncertainty in the industry, especially as the approval window for a Bitcoin ETF approaches in January. The recent claim by the SEC Chairman that crypto is not a priority raises doubts about the future of the industry and its regulatory prospects.