By John E. Deaton, Founder and Host, CryptoLaw
Two months ago, I made the decision to stand up for cryptocurrency holders who have been wrongly harmed by public officials who are sworn to protect the interests of investors. In connecting with so many holders of XRP and other digital assets, I’ve seen the growing interest in easy access to more information and analysis from our perspective – the actual holders of cryptocurrencies. The coin issuers, crypto companies and exchanges, have their platforms, as do the regulators. It’s important that we, too, have a resource to stay informed and to better understand what is happening in the legal and regulatory space, as we’ve learned, unfortunately, it can have a catastrophic impact on us.
So today, I am launching CryptoLaw as part of a solution.
The last half-decade was, by far, the most hostile period of overreaching government actions against cryptocurrencies since the emergence of blockchain technology in 2008. The Securities and Exchange Commission (SEC), under the leadership of Jay Clayton, whom Rolling Stone described as “the most financially conflicted SEC chairman in history,” launched his war on crypto. Under Clayton’s leadership, the SEC launched multiple enforcement actions that consistently relied on old, outdated laws that never imagined giving it the blanket jurisdiction to regulate this innovative asset class.
As his final act only hours before leaving the SEC, Clayton filed the most significant SEC enforcement action in modern history when the SEC sued Ripple Labs and two of its executives over its use of the XRP cryptocurrency related to its payments software. Clayton alleged in the lawsuit that all of the XRP that holders possess, the billions of coins we have been buying and selling on the open exchange markets, have been unregistered securities for over seven years. This was a shock to those of us who bought XRP, as many holders have never even heard of Ripple. Clayton never consulted investors, never bothered to learn that we never considered XRP to be a security, and had no expected stake in the company’s success or failure. To us, it has always been a currency.
The SEC’s reckless action crashed the value of XRP and led to its delisting on exchanges due to the sudden legal risk. It was a needless blow to XRP holders wiping out over ten billion of estimated value from individual investors. On January 1, I petitioned the U.S. District Court in Rhode Island on behalf of myself and other XRP holders to demand the SEC to pull back from its claim that our holdings are unregistered securities.
I also learned that I’m not alone, nor is the XRP community. Many cryptocurrency holders are lost in a haze of confusion over what the government might do to us next, given the complete lack of regulatory clarity. This lack of clarity makes the SEC v. Ripple case and my case even more significant, as the outcome may determine the future use of all crypto currencies in the U.S. CryptoLaw aims to follow the bigger picture and offer a helpful resource for information for the individual investor.
CryptoLaw will be updated regularly, and I will be adding my views and analysis here (not professional legal or financial advice of any kind, just my personal take) and on my personal Twitter account @JohnDeaton1 as we go forward. I want to thank Wayne Brough of the Innovation Defense Foundation and Thomas Hodge of @Cryptolicy for supporting the launch of this site, as both have followed the legal and regulatory situation for some time and will be assisting here as well.
Please follow this site on Twitter at @CryptoLawUS for updates and alerts, and share it with your friends throughout the crypto community.