- John Deaton called for firing SEC officials linked to past misconduct, including cases like the Debt Box controversy.
- Deaton proposed replacing the SEC’s crypto unit with a general fraud unit to reduce overreach and improve regulatory focus.
- The proposed reforms include defining the SEC’s jurisdiction to exclude DeFi and self-custody for blockchain innovation.
John Deaton, a prominent attorney and pro-XRP advocate, has detailed four critical reforms he believes are necessary for the U.S. Securities and Exchange Commission (SEC). These proposals, directed at incoming SEC Chair Paul Atkins, aim to improve regulatory practices in the cryptocurrency sector. Deaton emphasized immediate actions to address transparency issues and operational inefficiencies within the agency, particularly those affecting the digital asset industry.
Call for Staff Overhaul
Deaton urged Paul Atkins through his official X account to begin his tenure by addressing personnel misconduct during Gary Gensler’s leadership. He called for the termination of SEC staff implicated in cases like the Debt Box controversy. According to Deaton, removing such individuals would be a significant step toward accountability. He stated that retaining these officials would hinder progress under new leadership.
Proposal to Dissolve the SEC Crypto Unit
The attorney advocated for dismantling the SEC’s crypto unit, suggesting it be replaced by a general fraud unit. Deaton argued that a specialized crypto unit contributes to overreach and inefficiency. He proposed a structure where all fraud cases, regardless of industry, are handled under a unified framework. This approach, Deaton explained, would streamline regulatory efforts and reduce unnecessary scrutiny on cryptocurrency projects.
Clarification on DeFi and Self-Custody Jurisdiction
Deaton emphasized the importance of clarifying the SEC’s control over decentralized finance (DeFi) and the self-custody of digital assets. He recommended that the new leadership explicitly state that these areas should not fall under the SEC’s regulatory purview. This step, he noted, would provide clearer boundaries for innovation in the blockchain sector.
Support for Balanced Leadership
Ripple CEO Brad Garlinghouse expressed support for Atkins’ leadership, reflecting Deaton’s calls for regulatory transparency. Garlinghouse stressed the need for a less adversarial approach to the cryptocurrency industry. He also supported the push for clearer guidelines, which would foster innovation while ensuring investor protection.
