Attorney John Deaton Says To Keep Your Eyes On January 30th—The Fate Of Crypto Decided?

Attorney John Deaton believes that January 30th is the most important court date for the crypto industry at the moment.

The hearing concerns the LBRY case and LBRY’s attempt to limit the SEC’s remedies and regulatory retribution on the platform and its users.

Deaton explains that if the SEC gets its way, the regulatory agency can go into the secondary market and prevent people from using LBRY for personal purposes outside of investment.

He goes on to explain that there are many such users and that is why he filed an amicus brief on behalf of Naomi Brockwell…

Furthermore, according to Deaton, the SEC is violating the law and using overly harsh measures in a non-fraud case; he concludes that the SEC could only be doing this as a punitive and draconian measure to thwart the entire industry.

Here’s his full Twitter thread:

The proposed language could theoretically allow the SEC to reach into the secondary market and prevent transactions from people who are only users of the platform who never acquired #LBC for investment reasons.

— John E Deaton (@JohnEDeaton1) December 28, 2022

This is why, on behalf of Naomi Brockwell, I filed the amicus brief and filed a motion to be admitted pro hac on the issue.

This case – not getting a lot of industry attention (ie there aren’t 15 amicus briefs in support of LBRY like in @Ripple) – the following is at issue:

— John E Deaton (@JohnEDeaton1) December 28, 2022

It appears the SEC is doing the same thing in LBRY – even though the SEC won.

LBRY, like Ripple, is a non-fraud case. A strict Section 5 violation – failure to register #LBC sales.

Ask yourself: Why is the SEC seeking disgorgement in this non-fraud, failure to register case?

— John E Deaton (@JohnEDeaton1) December 28, 2022

U Today explained:

The SEC requested a penalty equal to LBRY’s full pecuniary gain of $22,151,971, stating that LBRY’s gross receipts for its Section 5 violation amounted to the sum it received in return for its sale of 280 million LBC on trading platforms.

 

The SEC – again – is ignoring applicable law. The Supreme Court in Liu v. S.E.C. (2020) requires the SEC to deduct any of LBRY’s legitimate business expenses. If the 💰 from token sales were used – as the SEC alleged – to build the business – that 💰was then legitimate expenses.

— John E Deaton (@JohnEDeaton1) December 28, 2022

3) the language of the proposed permanent injunction (which is provided above), coupled with the SEC’s absolute refusal to distinguish secondary market sales or even transactions by users, demonstrates the SEC’s intent to expand its jurisdictional reach into the secondary market.

— John E Deaton (@JohnEDeaton1) December 28, 2022

In related news from Daily Hodl, Deaton took aim at Gary Gensler, believing that he will further depress crypto prices:

Deaton says he expects Gensler to sue a crypto exchange and argues that most of the exchange’s tokens are unregistered securities:

“Coinbase has a market cap under $9B w/$5B in cash. I wouldn’t be surprised to see a takeover attempt if [Coinbase CEO] Brian Armstrong doesn’t accept an incumbent partner. I wouldn’t be surprised if Gary sues Coinbase attempting to serve as the proverbial straw, while investors get screwed.”

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