SEC crypto ‘overreach’ cost small investors $15 billion: John Deaton
According to a prominent pro-crypto lawyer and Senate candidate, the excessive interference of the Securities and Exchange Commission (SEC) in the cryptocurrency industry has caused retail investors to lose more than 15 billion dollars.
The US securities regulator has often been criticized for its enforcement-heavy regulatory regime on the cryptocurrency industry.
John Deaton, a lawyer and Republican candidate for the US Senate, said the SEC should be held accountable for its actions because “massive overlap” cost investors $15 billion.
A pro-XRP advocate wrote in a September 13 X post:
“The SEC's misconduct and gross overreach cost small investors more than $15 billion. On behalf of the 75,000 small investors I represented, we do not accept the SEC's apology.
Source: John E. Deaton
Deaton added that Sen. Elizabeth Warren intends to hold the SEC accountable for regulatory actions because it “doesn't work.”
Dayton's announcement comes two weeks after the pro-XRP advocate won the Massachusetts primary for US Senate, where he will face off against Democratic Sen. Elizabeth Warren in November.
Related: Crypto millionaire loses $43 million on Ether-Bitcoin trade bet
SEC No Longer Treats Cryptocurrencies as Securities: Court Application
In a dramatic shift, the SEC appears to be backing away from its previous position that cryptocurrencies are securities.
According to a court filing shared by Coinbase Chief Legal Officer Paul Grewal in a September 13 X post, the SEC clarified that cryptocurrencies themselves are not considered securities.
In an amended complaint against Binance, the SEC wrote in a court filing:
“The SEC regrets any confusion it has invited by falsely and repeatedly stating that tokens themselves are securities.
SEC court application. Source: Paul Grewal
Industry participants saw the announcement as a ludicrous change, given that the SEC had previously held that the XRP token was a security.
“What I'm asking is for the SEC to comply with the law and make it clear that the token itself (XRP) is not a security. Attorneys at the SEC not only refused to do so, but they personally attacked me.
On September 12, the SEC agreed with eToro, forcing the US wing of the trading platform to stop trading almost all of its crypto assets and pay a $1.5 million fine.
Related: Bitcoin ‘stress level' threatens more September losses, but there is a silver lining
SEC crypto enforcement has increased more than 3,000% since 2023.
The US SEC had a record year for crypto enforcement, even before the eToro settlement.
As of September 10, the SEC It has imposed nearly $4.7 billion in enforcement actions against crypto companies and executives by 2024, a jump of more than 3,000% from 2023.
The total amount of money enforcement won by the SEC in 2024 will cover the entire amount between 2013 and 2023. Source: Social Capital Markets
According to a Sept. 9 report from Social Capital Markets, the SEC's record-setting year was boosted largely by its massive $4.47-billion settlement with Terraform Labs and former CEO Do Kwon in June. .
In the year The regulator's 11 enforcement actions in 2024 represented a 3,018% increase from the $150.3 million in fines in 2023, although it took 19 fewer actions against crypto companies.
Magazine: Binance.US by SEC, Mt. Gox scores late fees and other news: Hodler's Digest, September 17-23.
