John Deaton Criticizes SEC Chair Gary Gensler Over Coinbase Appeal

John Deaton, the pro-crypto Republican candidate running for Senator Elizabeth Warren’s seat, has taken a strong stance against SEC chair Gary Gensler over the recent Coinbase appeal. Deaton criticized Gensler for the SEC’s regulation-by-enforcement approach, calling him a “bad faith regulator” in a post on X (formerly Twitter).

Coinbase filed an interlocutory appeal in federal court seeking clarification on whether digital assets qualify as investment contracts (securities). Deaton pointed out the ineptitude of Congress and accused Gensler of pursuing a political agenda, stating that Coinbase is seeking regulatory clarity through the judicial system.

The SEC originally sued Coinbase in June 2023 for operating as an unregistered crypto trading platform. Despite Coinbase’s attempts to dismiss the case, U.S. District Judge Katherine Polk Failla denied their motion last month.

Deaton continued to criticize Gensler and the SEC, claiming they do not protect small investors and only serve political interests. He emphasized the importance of representing the interests of Coinbase’s employees, shareholders, and customers who do not own shares in the company.

The digital asset community has long been critical of the SEC’s enforcement-focused approach to crypto regulation, with lawsuits filed against major industry players like Ripple and Binance. SEC Commissioner Hester Pierce recently spoke out against the agency’s treatment of the digital asset sector, stating that their actions are “scaring people off.”

The SEC and Coinbase were expected to go to trial this spring, but the recent appeal by Coinbase may slow down the legal battle. Deaton’s strong stance against Gensler and the SEC highlights the ongoing tensions between regulators and the crypto community.