John Deaton on the Challenges Faced by Crypto Businesses and the SEC
John Deaton has opened up about the relationship between the cryptocurrency industry and the U.S. Securities and Exchange Commission (SEC), shedding light on the challenges faced by businesses seeking to comply with regulatory standards. In a recent statement, Deaton echoed Coinbase’s Paul Grewal’s sentiments, stressing that the current strategy used by the SEC has unintended consequences.
Key Points:
- The SEC perceives inquiries for legal advice on lawfully selling tokens in the U.S. as potential intent to violate the Securities Act.
- Seeking advice to comply with the law should not be seen as proof of an intent to break the law.
- The SEC’s approach is confusing, as companies sharing information about partnerships and token sales are used against them.
- Lawyers are advising clients and entrepreneurs not to cooperate with the SEC and not to be transparent, which contradicts investor protection.
- Specific cases within the industry, such as Brian Armstrong’s attempts to meet with SEC Chair Gary Gensler, highlight the inconsistent treatment.
Hot Take: The SEC’s current approach to regulation is deterring good conduct and hindering transparency in the crypto industry. By perceiving inquiries for legal advice as intentions to violate the law, the SEC is discouraging businesses from seeking guidance and cooperation. This lack of clarity and consistency in regulatory standards is undermining investor protection and inhibiting the growth and development of the industry.
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