XRP lawyer John Deaton accused the Securities and Exchange Commission (SEC) of targeting legal crypto companies while ignoring real fraudsters like Sam Bankman Freed (SBF). And I ignore Kwon in today’s X post.
“The SEC missed committing actual fraud with code because it had a bureaucratic hack of Gary Gensler, focusing on implementing the political agenda set by Senator Elizabeth Warren. Remember that I have met Bernie Madoff – SBF – of Crypto,” writes Deaton.
“The SBF was allowed to meet with Senator Maxine Waters, former CFTC Chairman Rostin Benham, and testify before Congress. Why was he given such incredible access? Is it? Simple! He paid for it.”
Testimony from the SBF’s own trial said he had $10 million in regulatory access during the middle of 2022.
It took the SEC years to chase after Kwon despite clear signs of fraud in Terra’s operation. When the SEC finally summoned him at the Crypto Conference, it met public ocklol and rage, Gensler’s face even edited to the body of Darth Vader in Memes.
SEC Chief of Staff Amanda Fisher defended the agency’s handling of KWON and admitted that the SEC may have been more aggressive but condemned Kwon’s legal manipulation by delaying the action. Ta. “The SEC should have sued a lot, not just something,” Fisher said. “But it is difficult to do that when defendants fight the legality of subpoena and drag discoveries over the years.”
She then criticized the crypto community and asked why many people gathered to defend Kwon rather than pushing for stricter enforcement. “What kind of introspection do you have about the industry that is focused on Kwon’s defense?” she asked.
Federal Courts tear the SEC’s enforcement strategy
The SEC’s aggressive crackdown on Crypto companies has resulted in multiple legal defeats. The judge accused the SEC of acting illegally in its enforcement approach.
Deaton pointed to a ruling in which a federal judge stated that SEC’s lawyers “lack of faithful loyalty to the law.” The Court of Appeal later found that the SEC had acted “arbitrarly and on a whim,” and the third judge went to sanction the SEC for lying to the court.
One of the most controversial actions of the SEC under Gensler was the lawsuit against Coinbase. The SEC approved the Coinbase IPO in 2021, saying it is in the best interest of the public. Less than two years later, the agency looked back and sued Coinbase, claiming that its entire business model was illegal.
But now, the SEC reportedly has dropped its lawsuit against Coinbase. Coinbase CEO Brian Armstrong has confirmed at X that he will sign a contract with SEC staff to dismiss the case, but it has not been officially announced by the agency itself.
Brian called the decision a big victory and thanked Crypto voters for helping to select custody politicians. “The code voters were real and appeared in millions,” he wrote.
The SEC originally provided unregistered securities, accusing Coinbase of running illegal exchanges, brokers and clearing agencies. The lawsuit was part of a broader crackdown that Trump promised to turn around during his campaign.
Trump’s new SEC scraps old Crypto Enforcement Playbook
Under the Trump administration, the SEC is taking a new approach. The agency has announced the creation of Cyber and Emerging Technology Units (CETUs) to replace crypto assets and cyber units.
Leading by Laura D’Allaird, Cetu is made up of 30 fraud experts and lawyers who focus on cybercrime and economic fraud. Acting Chairman Mark Weda said CETU’s goal is to protect investors while allowing crypto innovation to grow, and “This new unit will be the job of the Cryptocratic Task Force, led by Commissioner Hester Perth. It complements,” he added.
CETU prioritizes fraud cases related to AI, blockchain and social media. They also chase hackers who steal insider information about social media, or hackers who track acquisitions of fake trading websites and retail brokerage accounts.
Trump’s campaign explicitly targeted the SEC’s aggressive crackdown on crypto. During his rally, he repeatedly promised to fire Gary Gensler on the “first day” of the presidency. Jensler resigned himself before Trump could.
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