- John E Deaton criticizes the SEC for a recent settlement of the SEC-Bittrex lawsuit.
- Challenging Gubir S. Grewal, Deaton claims that no investors have been protected by the settlement.
- The lawyer invited Grewal for a meeting to discuss the matter.
John E Deaton, an XRP lawyer and founder of the crypto regulatory news platform CryptoLaw, shared a thread on X earlier today, lambasting the Securities and Exchange Commission (SEC) for the recent settlement of the SEC-Bittrex lawsuit. Following the announcement of the settlement, the attorney took to X to challenge the regulator’s handling of the case.
Hey @SECEnfDirector, you pat yourself on the back for this settlement. How many investors did you protect from this settlement? Is this one similar to the protection you provided from the @BlockFi settlement? You know the case where the @SECGov became one of the largest creditors… https://t.co/ZPZqcxDnmD— John E Deaton (@JohnEDeaton1) August 10, 2023
In April 2023, the SEC filed a lawsuit against the crypto trading platform Bittrex and its co-founder William Shihara “for operating an unregistered national securities exchange, broker, and clearing agency”. Later, in May, the platform filed for Chapter 11 bankruptcy, declaring liabilities between $500 million to $1 billion. Yesterday, the regulators announced that the platform has agreed to settle the charges with a payment of $24 million.
Gubir S. Grewal, the Director of the SEC’s Division of Enforcement, commented that the platform had been evading federal securities laws for years. He lamented the adverse effects of violating regulations, stating:
Today’s settlement makes clear that you cannot escape liability by simply changing labels or altering descriptions because what matters is the economic realities of those offerings. I am grateful to the SEC staff for aggressively pursuing non-compliance in the crypto industry, resolving this matter, and bringing additional relief to harmed investors.
Responding to the SEC’s announcement and Grewal’s comments, Deaton challenged the regulators to present a clear picture of the case, arguing that while the commission congratulates itself for the settlement, “no one has the clarity in the space”. Further, he enquired, “How many investors did you protect from this settlement?”.
In addition, Deaton raised questions about the ethics of the regulators’ lawsuits and their subsequent settlements. The attorney asked Grewal if he would confirm or deny whether the controversial Hinman speech was proofread and approved in advance by the SEC’s Ethics Office. The Hinman speech refers to the speech delivered by the former SEC director William Hinman, in which he asserted that Ether should not be considered a security. In addition, the lawyer also invited the Division of Enforcement Director to join him for a meeting to answer a few questions if he is a “civil servant with nothing to hide”.
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