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Republican attorney and advocate for cryptocurrency, John Deaton, who is vying to become Sen. Elizabeth Warren’s contender in the Massachusetts Senate race, has submitted a supportive brief in Coinbase’s legal dispute against the Securities and Exchange Commission (SEC). Coinbase is seeking a higher court’s decision on whether tokens traded on secondary markets without obligations on the issuers should be classified as securities.
Deaton supports Coinbase’s initiative, arguing that the SEC is taking an unconstitutional approach in accusing certain token trades of violating securities laws. Emphasizing his stance as a vocal supporter of cryptocurrency, Deaton filed a friend-of-the-court brief in Coinbase’s attempt to have a higher U.S. court determine the criteria for classifying a digital token as a security.
As one of the Republican candidates competing for the opportunity to challenge Sen. Elizabeth Warren, Deaton aims to strengthen Coinbase’s case in its legal battle with the SEC. Coinbase has sought an interlocutory appeal to obtain a separate ruling on the specific legal question regarding digital asset transactions that do not entail obligations to the original issuer, potentially falling under SEC-regulated investment contracts.
Deaton argues that the SEC, driven by political motives and compromised integrity, relies excessively on interpretations of the Howey test to categorize tokens unequivocally as securities, exceeding its jurisdiction. He criticizes the SEC’s broad application of the Howey test, asserting that it should involve a transaction-by-transaction analysis, considering the vast array of digital assets and transactions occurring on various blockchains.
Having previously intervened in Ripple Labs’ confrontation with the SEC, Deaton has established himself as a prominent figure in the digital asset community. While aspiring to secure the Republican nomination in the September primaries before challenging Warren in the November general election, Deaton faces stiff competition. Despite the challenges, polls indicate Warren’s strong likelihood of retaining her Senate seat.
Deaton is slated to speak at Consensus 2024 in Austin, Texas, next month, further highlighting his engagement in cryptocurrency advocacy and legal matters.
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