- October 23, 2023
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
John E Deaton, a prominent lawyer known for representing XRP holders and vocalizing his criticisms of Jay Clayton’s tenure as the SEC Chairman, recently took to Twitter to highlight what he believes to be glaring conflicts of interest surrounding the SEC’s enforcement action against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen.
Deaton tweeted, “When the XRP case was filed on Clayton’s last day in charge at the SEC, I immediately pointed out the massive conflicts of interest by him voting to bring an enforcement action against Ripple, Brad Garlinghouse and Chris Larsen.”
This tweet comes in the wake of a statement made by Brian Costello, who lambasted the SEC’s role in allegedly concealing financial misdeeds connected to Chinese executives.
Costello remarked that under both Clayton and current chairman Gary Gensler’s leadership, the SEC may have overlooked potential misdemeanors tied to specific Chinese business magnates, singling out Neil Shen from Sequoia.
Costello stated:
The SEC’s role in hiding Chinese executives, like Neil Shen from Sequoia, and other US capital market crimes has played a significant role in normalizing China’s frauds. Gary Gensler and Jay Clayton, you had an opportunity to prioritize our nation’s defenders, but your personal interests prevailed.
The Hidden Agenda By Clayton And Gensler
Peeling back the layers of professional entanglements, Deaton unveiled potential biases arising from Clayton’s affiliations. He underscored Clayton’s association with Patrick Berarducci of the prestigious Sullivan & Cromwell law firm. Intriguingly, Berarducci had also served as Deputy GC at Consensys, a pivotal entity in the Ethereum ecosystem, and as Co-Chair of The Brooklyn Project.
Highlighting these intricate connections, Deaton noted, “One of Clayton’s partners at Sullivan & Cromwell, Patrick Berarducci, was deputy general counsel at Consensys and co-chair of The Brooklyn Project, which claimed to be building an alliance with the SEC related to crypto.”
As Deaton highlights, other lawyers from Sullivan & Cromwell also went to work at Consensys. Moreover, the law firm not only represented Ethereum’s Consensys but “also brokered the deal when Consensys acquired JP Morgan’s Quorum and the JPMCoin. Clayton & Hinman, along with Hinman’s partner Leming Chen, brought the Alibaba IPO to market. Simpson Thacher’s Chen went to Alipay.”
Further complicating matters, Deaton draws attention to the spirited rivalry between cryptocurrencies, underscoring the intense competition between XRP and ETH. He reminisces, “XRP & ETH battled each other for the #2 spot behind BTC for years.”
Such rivalries, when juxtaposed against Clayton’s professional affiliations, beget concerns of impartiality in enforcement decisions involving Ripple. The lawsuit against Ripple may have set the company back years – a head start that may have yielded major advantages for Consensus and Ethereum.
Challenging Clayton’s actions head-on, Deaton asserted, “At his confirmation, Clayton agreed he would be conflicted from voting AGAINST an enforcement action involving one of S&C’s clients. But, paradoxically, he voted FOR an action AGAINST Ripple, a formidable adversary of his law firm’s client.”
Pro-XRP Lawyer Uncovers More Ties
Deaton doesn’t stop there though. He delves into Clayton’s affiliations post-SEC, emphasizing his association with entities like Apollo Group and One River, which have substantial stakes in cryptocurrencies. Most notably, Deaton pointed out, “Clayton joined One River after it made a $1B bet on BTC & ETH, the only two Crypto assets given regulatory clarity by Hinman’s speech.”
Moreover, Deaton does not hold back on William Hinman, former director of the SEC’s Division of Corporation Finance, suggesting infractions and conflicts during his term. As Bitcoinist reported, William Hinman is in the crosshairs of the XRP community for his documented strong ties to Ethereum’s Vitalik Buterin and Joseph Lubin prior to his famous speech.
Expounding further, Deaton accentuates potential collusion, indicating a meeting between Clayton and Gensler, his successor. He provocatively ponders, “Why would you file a case of this magnitude on your last day and then leave it for the next administration to deal with? Or was this a coordinated effort?”
At press time, XRP traded at $0.5236.
