Attorney Deaton Says Ripple Investors Lost $15 Billion Due to SEC’s Mistake

Cryptocurrency enthusiasts continue to lambast the SEC for its crypto regulatory approach.

The cryptocurrency community has continued to slam Gary Gensler and the Securities and Exchange Commission (SEC) for their regulatory approach toward crypto. 

Crypto investors believe the SEC’s regulatory tactic in the crypto space is unfriendly compared to other financial markets. 

Deaton and Messari Founder Blast SEC

Ryan Selkis, the founder of Messari, blasted Gensler for focusing mainly on the “SEC’s power grab” over the entire crypto sector instead of prioritizing investors’ protection. 

According to Selkis, Gensler’s nonchalant attitude toward investor protection has resulted in losses worth $7 billion in “SEC’s fraud [for its failure] to approve a spot ETF at the expense of Grayscale investors.” 

$1bn was lost to crypto fraud last year.

$7bn has been lost to the SEC’s fraud in failing to approve a spot ETF at the expense of Grayscale investors.@GaryGensler doesnt care about protecting investors, promoting capital formation, or making markets fair. He cares about power.

— Ryan Selkis ? (@twobitidiot) August 30, 2022

Selkis’ tweet prompted a reaction from attorney John Deaton, who also slammed the SEC for causing XRP investors losses to the tune of $15 billion when the agency charged Ripple for allegedly offering unregistered securities in the U.S.  

Attorney Deaton, who is currently representing over 72,000 XRP holders in a class action suit against the SEC, said the agency intentionally decided not to limit its allegations against the Silicon Valley company to specific sales. 

However, the Securities and Exchange Commission labeled all XRP sales, including those conducted on secondary markets as unregistered securities. 

The development prompted all U.S.-based cryptocurrency exchanges, including Coinbase, to de-list XRP from their trading platforms. Thus, causing XRP investors to suffer losses worth $15 billion. 

And $15B was lost because the SEC intentionally chose not limit the allegations against Ripple to specific sales made by Ripple and its executives but instead alleged all XRP including secondary market sales of XRP are unregistered securities. https://t.co/o3GGANtaOM

— John E Deaton (213K Followers Beware Imposters) (@JohnEDeaton1) August 30, 2022

SEC and Gensler Come Under Heavy Fire

In recent times, the SEC and Gensler have come under heavy attack for threatening the existence of the U.S. cryptocurrency market. 

As the SEC seeks to gain total control of all crypto assets except Bitcoin, crypto stakeholders have urged the agency to provide regulatory clarity for the emerging market. 

However, the agency has ignored all calls with many people, including Forbes journalist Roslyn Layton, accusing the SEC of preferring regulation by enforcement instead of regulation by rules. 

Over 200 charges have been filed against crypto firms since 2017 to date by the agency, including the Ripple vs. SEC lawsuit. 

At the moment, there is no guarantee that the SEC will collaborate with industry stakeholders to develop clearer regulatory guidelines for cryptos anytime soon.

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