John Deaton Criticizes SEC Chair Gensler’s Relationship with Bankman-Fried
The US Securities and Exchange Commission (SEC) concluded its fiscal year with record financial settlements. Pro-XRP attorney John Deaton is highlighting SEC Chair Gary Gensler’s controversial ties to FTX founder Sam Bankman-Fried. Deaton's remarks are prompting scrutiny of the SEC’s regulatory strategy, especially regarding its dealings with the defunct crypto platform and its former CEO.
SEC Chair Criticized for Favoring Bankman-Fried
In a recent post on X, Deaton criticized Gensler for favoring Bankman-Fried while excluding notable US crypto leaders like Coinbase's Brian Armstrong and Kraken's Jesse Powell. Deaton interprets Gensler’s actions as indicative of bias, with Bankman-Fried receiving preferential access amid ongoing scrutiny of the SEC’s crypto oversight, raising questions about regulatory fairness.
Concerns have been raised regarding Bankman-Fried's $10 million in political donations, suggesting that financial influence may have afforded FTX favored status in regulatory discussions, which other US-based crypto firms lacked. This situation has further fueled skepticism about the SEC's impartiality.
As discussions about Gensler’s relationship with Bankman-Fried persist, the SEC reported a record $8.2 billion in financial remedies for fiscal year 2024. Enforcement actions, however, decreased by 26% from the prior year, totaling 583 cases, including 431 standalone actions—a 14% reduction from 2023.
A considerable portion of financial recoveries, amounting to $4.6 billion, stemmed from the SEC’s case against Terraform Labs and its founder Do Kwon, contributing to the commission’s record. The decline in enforcement activity raises concerns about the agency’s effectiveness in regulating the crypto sector amidst growing scrutiny.
Deaton Calls for Regulatory Reform
John Deaton has persistently criticized the SEC, advocating for reforms in the crypto industry. He argues that reliance on outdated regulations is obstructing advancements in blockchain technology. Recently, he amplified his call for a modernized and transparent regulatory framework to address challenges in blockchain and cryptocurrency.
Deaton's concerns coincide with SEC Chair Gary Gensler’s impending departure from office on January 20, 2025, confirmed by an official press release and a post on X. Gensler’s exit aligns with Donald Trump’s upcoming inauguration as the 47th US President. Gensler's tenure has been characterized by controversy and shifting regulatory positions, particularly concerning cryptocurrency.
In light of the expected leadership transition, Deaton endorses Brad Bondi as a suitable successor. Bondi's background in legal and regulatory reform positions him as a candidate capable of delivering the clarity and balanced oversight necessary for the crypto sector's growth. Deaton emphasizes the necessity for new leadership at the SEC to foster a more open and progressive regulatory environment.