Deaton Reacts as Expert Expresses Concerns About SEC Potentially Labeling Bitcoin a Security
Attorney Deaton reiterated that he would not rule out the SEC attempting to deem Bitcoin, the world’s largest cryptocurrency by market cap, a security.
Prominent crypto lawyer John Deaton has reacted to concerns that the U.S. SEC could potentially label Bitcoin (BTC) a security.
SEC Wants “Security” Language in BlackRock S-1 Filing
Recall that BlackRock recently filed an amended S-1 filing with the SEC, with the asset manager including new language about anti-money laundering compliance and efforts it would take to monitor unusual price movements.
Reacting, market observer and pro-Bitcoin litigator Joe Carlasare disclosed that the SEC wants the security “language” to be included in the BlackRock S-1 filing for its proposed spot BTC exchange-traded fund (ETF).
Carlasare attached a document to the tweet, highlighting concerns that the SEC could take an approach that Bitcoin is a potential security.
“Any enforcement action by the SEC or a state securities regulator asserting that Bitcoin is a security, or a court decision, to that effect would be expected to have an immediate material adverse impact on the trading value of Bitcoin, as well as the shares,” an excerpt from the document read.
Deaton Reacts
Attorney Deaton responded to the comment, recounting how he previously stated that every coin is in danger, given that the SEC was using dangerous and grossly overbroad language when discussing XRP and other tokens.
Deaton noted that many people dismissed his concerns about the SEC claiming that Bitcoin was a security.
He added that despite SEC senior officials, including chairman Gary Gensler, saying that Bitcoin was not a security, the commission’s lawyers in the Ripple case still stated that the regulator had not taken an official position on Bitcoin and Ethereum.
Almost two years ago, I did a video for @CryptoLawUS: “Every Coin is in Danger”, regarding my view that the @SECGov was using dangerous and grossly over broad language when discussing XRP or any other token. I said, as absurd as it sounds, I wouldn’t rule out the SEC attempting… https://t.co/iLqkZgpdBD
— John E Deaton (@JohnEDeaton1) December 5, 2023
It bears mentioning that Gensler has repeatedly declared that Bitcoin is the only crypto asset he considers to be outside the SEC’s regulatory purview. Similarly, former SEC director Bill Hinman declared BTC and ETH to be non-securities.
Furthermore, Attorney Deaton mentioned that he suffers from confirmation bias and has continued to assume that “there is no position too absurd that the SEC won’t take.”
Last year, Attorney Deaton warned Bitcoin proponents, including Michael Saylor, that the SEC could turn on Bitcoin and label the asset a security. He made the comment after Saylor urged the SEC to shut down Ethereum and Ripple for committing securities fraud.
Reacting, Deaton warned that the support Bitcoiners are giving to the SEC could eventually backfire, as the regulator might make a u-turn and label the world’s largest cryptocurrency a security.