Crypto is facing a pivotal moment in its history with the SEC suing Coinbase for listing tokens on their exchange. Lawyer, Author and Crypto advocate John E Deaton gave Discover Crypto an exclusive interview to talk about the case and whats happening in the world of crypto.
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#coinbase #crypto
If coinbase wins for example if the Judge were to say that the the tokens Themselves are not Securities and that Coinbase as an intermediary they're not An issuer it really would put coinbase In a massive regulatory Advantage all right let's get right into The interview we have famous crypto Lawyer John Deon joining us today John Deon how are you doing today good how Are you doing M I'm doing fantastic John I just want to give people a little bit Of exposition here for those who haven't Really followed closely exactly what's Happening with the SEC versus coin base And you know maybe they don't have a law Degree can you explain just what is this Lawsuit about and why is it so Important well they need to put into Context the following in 2021 coinbase asked to go public and the SEC had to make a determination coinbase Said not only do we want to go public And become a publicly traded company and Be the largest Exchange in the United States we want to do it faster we want To the SEC to place it on what's called Acceleration and in order to do that the SEC must sit back and and think is this In the Public's best interest to allow This acceleration and guess what the SEC Said yes we think that is is in the Public's best interest to Grant an Accelerated IPO to coinbase then you
Fast forward two years later and the SEC Files a case against coinbase and says The entire business model is illegal so That's the context that everyone has to Understand why would the SEC Grant a Registration accelerate it bless it and Then two years later turn around and say Oh no all the assets that you're trading That we knew you were going to be Trading they're all illegal unregistered Securities and so it's a huge Significance if coinbase is successful Then it's game over for the SEC yeah so you know what does this mean For the overall altcoins that the SEC Has been targeting I mean they've kind Of pivoted their decisions on what's Happening to this Market non-stop back And forth it's almost every single week They have a new idea or thought on the Entire market so when you're looking at The altcoins that they've now said Pretty much everything other than Bitcoin is not or is a security how do They approach this with the the lawsuit What does this mean for altcoins if the Somehow does win this case against them It would be absolute devastating news Now we we need to say obviously this is A federal district court case so there Are appeals if coinbase wins the SEC can Appeal it if the SEC wins then of course Uh the coinbase can appeal it but the Precedent that it would set if the judge
Were to say yes these uh tokens we're Talking about cardano salana we're Talking about major CA altcoins if the SEC is successful and the judge agrees And says yeah they're all unregistered Securities then basically everything is In unregistered security Now eth is in a Very kind of special place and I'll tell You why you're right the Gary giner in The SEC has said everything but Bitcoin Essentially is a security but the SEC Has already granted eth Futures Contracts so they're there exist today Just like there used to be Bitcoin uh Futures ETFs there exist eth future ETFs And so Black Rock has already submitted For a spot eth ETF and and it's going to Be delayed no doubt because the SEC Already delayed it but most people think The conventional wisdom is that eth will Get a spot ETF eventually because They'll just sue the SEC the way Grayscale did over the spot Bitcoin ETF But you're right as of right Now everything except Bitcoin according To the SEC is an unregistered security And it would be devastating you'd see a Complete collapse I think I'm not a Price guy you guys know that more Than I do sorry for the language but um Uh it it would be devastating I I I Would agree you know so we have Bitcoin Has a little bit of a unique distinction Ethereum has a little bit of a unique
Distinction are there any other all Coins on your radar that might serve as An outlier whether it's favorable or Unfavorable can you see xrp or a salana You know maybe bucking the trend where Bitcoin ethereum and maybe a third or Fourth altcoin is you know listed as Unique well xrp is already in that Unique status because the judge actually Wrote xrp in and of itself is not a Security so if you and if you also note That the coinbase case uh did not list Xrp Uh as one of those tokens that they were Claiming is an unregistered Security Even though they had already done that In Ripple so as of right now guys xrp is The only token that has judicial clarity As far as the token itself you know Bitcoin obviously uh with the spot ETF That's a foregone conclusion that's Always going to be a an outlier and have Its own distinction special place xrp Has this judicial uh Clarity if you will It hasn't really translated in price but It certainly uh is uh in a unique Position compared to the others cost Ripple 20000 million and of course xrp Holders and our 76,000 uh people that Joined had a big part of that Success yeah that was definitely a huge Breakthrough too and you know I kind of Have a thought on the I want to get your Thoughts on the outcome of this let's
Say coinbase does take the win on this I Know you've put out percentages between 40 to 50% that I've seen I don't know if Those have adjusted you know over the Last few days I think that was a pretty Recent interview uh but you know if Coinbase does come come out on top on This does this make them essentially Stronger than the SEC because it's not Going to prevent them from listing Future altcoins and if they have now This regulatory Clarity out of this Lawsuit and win against them in like you Said a federal court does that mean They're going to be creating this Coinbase effect essentially where any Project that gets listed on this not Only gets that Clarity is now on a Publicly traded company and that Obviously have a pretty significant Effect on these altcoins oh that that's An outstanding point it really is Because um if you're a traditional Finance guy and you want exposure to Crypto a lot of people are going to say Just go with coinbase obviously coinbase Is the custodian for a lot of these spot ETFs so they have that Niche um but You're 100% correct if coinbase wins for Example if the judge were to say that The the token themselves are not Securities and that coinbase as an Intermediary they're not an issuer There's the blind bid ass transaction
It's just an asset sell it's not a Security sell if that were to be the Outcome of this decision it really would Put coinbase in a massive regulatory Advantage and you're right any token Thereafter that would sort of get the Coinbase blessing which already has Judicial blessing and so it would have a Cascading kind of bootstrapping effect And so that's a great Point uh I want to Ask one more question about xrp you know We recently had IPO rumors starting to Circulate but recently they have taken a Step back saying well we don't pursue we Don't want to pursue any kind of IPO at The given time due to the regulatory Environment if we get someone to replace Guinsler in the next year or two do you See those IPO sand starting to shift and What are your thoughts on a ripple IPO Or Ripple Labs IPO potential Yeah I think Ripple uh you're right Ripple took it off the table uh as far As 2024 if guinsler were to somehow resign Which I don't foresee but if for some Reason the political pressure became too Much he became a political liability in An election year and he stepped away uh And then you got a new chairman who then Came in immediately with a hey this is a New sheriff in town and we're we're Going to work with entrepreneurs we're Not going to have such an anti- crypto
Platform or policy then I could see Potentially Ripple coming back to the Table but you have to understand they're In the still in the fight Ripple's in The the penalty phase of the case which Means the judge has to decide how much Do they have to pay remember this isn't A fraud case this is just hey you Technically violated this 1936 law U Even though we're in 2024 and uh you have to pay a fine Whether that fine is a 100 million or 10 Million I don't know but they're Actively still arguing there's no There's no indication of there's going To be a settlement between the SEC and Ripple so therefore they still have that Uncertainty what investors are going to Be hey well Ripple could maybe Ripple's Going to be find a billion dollars uh It's just not an environment that any Reasonable CEO would uh would take to The market with IPO it's too much of a Dark Cloud once that dark cloud is Erased there's a settlement Ripple gets Fined $10 million Brad Garing house Writes a check uh then the next day the Ipo's back on the table all right well Speaking of Ripple I want to put a Ripple through the New York Times Bestseller list uh check out brass Knuckle. John has a book out folks make Sure you go check that out but speaking Of policy you know you said the
Situation that's happening in Texas at The border between the Texas National Guard and the feder Federal agents is The most important thing happening in The nation at the moment well we now This morning we have a trucker Convoy Heading to the southern border do you See a similar situation happening in America that happened in Canada do you Think it's possible that Biden will Freeze bank accounts of these protesting Truckers I mean you know I don't I that Would be political suicide in my opinion Uh is there listen that you're assuming That Biden's calling the shots I don't Make that assumption um if someone were To do that though at this point in time Um I just would see that as political Suicide in an election year but but There's no doubt that the Border Situation has reached a level that is Mindboggling I mean I actually is am Fearful that we're gonna see Texas Agents versus you know federal agents What if someone you know draws a gr gun I mean are we going to have American Versus American you know fighting on the Southern border it it really is an Unfortunate situation and unfortunately We don't have the political leadership That we need in this country yeah well You know raon will be right there to Sell all the weapons to us so it's going To be bullish on those stocks for the
Chat listening in but no jokes aside Guys but you know a lot of people don't Care about politics but the at the end They politics they care about all of us In here so I'm very curious to kind of Get your thoughts on just the retail Side of this you led 70,000 xrp are a Huge part of that in you know kind of Fighting against the SEC early on in the Last Bull Run for our rights really just The natural right to be able to trade These assets and stand up against a Regulatory body that was just enforcing Policies that were quite Unconstitutional so from that Perspective what can a retail audience The average Joe do looking up to or just Look for up in anticipation of this new Election cycle which I'm not going to Say president but Administration is Really going to benefit them more is it Going to be coming down to the votes for Them or is it going to be actually Standing up and being a part of a Lawsuit that attacks the SEC and Gary Gendler for Market manipulation of one Of the most atrocious launches of a Financial product I've ever seen what Can we do just to help out well one Listen I'll make a plug to my crypto law Which is which I don't have sponsors uh I don't make any money but I have a Connect to Congress tab you can you just Put in your address takes 30 seconds and
You can draft a letter to it'll go Straight to your two senators and your Your house representative uh right now We have it plugged asking uh Patrick McKenry who's the chairman of the FC in The Congress to actually issue The Subpoena that he was threatening and he Writes all these letters and basically Our pre- uh programmed letter basically Says issue the dam subpoena which were Records of SPF and Gary guinsler and Other documents that the SEC must Overturn listen we have to fight Government intrusion whenever it comes And this is we have to also avoid a Nanny State people have a right to Determine what is in their family's best Interest if they want to own Bitcoin own Bitcoin you want to own xrp own xrp the SC should be focused on the Sam baitman Freeds or the Alex machinski and Celsius Or the doans and the fraud cases Focus Your attention on that because there is Fraud in crypto and there has been but As far as assets that people want to Have exposure to we have a right to this America I mean you should have the Freedom to say you know what I I can't Stand the fact that you're just printing Money all day and I'm gonna own Bitcoin Because whether it's a good investment Or not I believe it is a uh a hedge Against uh the debasement of the US Dollar regular people should have that
Access and what I would encourage people To do is is fight the accredited Investor rule which to me is the most Abhorent rule ever in financial markets Uh you could be a marine or or or in a Soldier in the Army you could serve your Country you could lose a limb you could Lose your life but you can't have Pre-ipo shares of any company because You don't have a million dollars Excluding your home or you don't make $250,000 a year for three years in a row And so I just think that it is time as Citizens that we speak up and and it can Make a difference there's people out There that say Hey you can never make a Difference the 75,000 xrp holders we Submitted affidavits the judge cited Those affidavits in her decision and so Naomi Brockwell uh allowed me to go in To speak in the library case for her and Other LBC holders the judge cited that Hearing so your participation can make a Difference and this election I'm not Going to get political but um uh freedom Is on the line and so I'd ask you to to Consider that that when you're making Your election Choice yeah Brockwell Fantastic resource when it comes to Freedom and you say you don't want to Make it political I'm going drag you Back into the arena because you brought Up FTX you brought up Sam bankman freed Or scam bankman fried everyone's
Accounts there if we get a new Administration do you think there'll be Any follow-up any kind of Investigation In some of the political donations or Are both sides dirty and both sides want To sweep it under the Rug the latter both sides in my opinion Have been dirty we live in we live in The corruption area guys and if you go Back in time you'd have to go back to The late 1800s to what was called the Gilded Age when there were like open Bribes and kickbacks going on in Congress and that's how bad it is I mean Think about the chairman of the FDA is The chairman of the FDA on Friday on Monday he's a board member of fizer You've got uh Hinman goes to A16z and they helped him write the Speech and now he's a partner with the Guys that helped him write the speech You know while he was making millions And millions from his law firm while he Was uh at the SEC Jay Clayton uh dropped An investigation against Apollo Group After Jared Kushner got a h huge hundred Million deal and then Jay Clayton is Named a board member of Apollo group as Soon as he leaves the SEC and so whether You're Republican or a Democrat they all Corrupt they all need to go term limits Need to be instituted in my opinion and We need to start having statutory bars If you work at the FDA you can't go work
For the pharmaceutical companies that You were just regulating if you work at The SEC you can't just go to Wall Street And work for the company that you were Just regulating and so we have to Institute that kind of uh ethics back in Our government yeah it's a blackmail Ocracy for sure we have you know you can You can start anywhere whether Jamie Diamond or Larry fing from Black Rock For saying years this money laundering Index are politicians are the world's Greatest Traders and call it a free Market even though they have inside Access and knowledge to their committees The amount of corruption is at an all Time at this point so I have to straight Up ask you just moving into this Election cycle then yeah we're going to Pull you in the ringer here you know What is a better Administration moving Forward for crypto then is it going to Be you know I'm not going to make it This a left or right issue it's which Administration are we focusing on and How do we anticipate the outlook for the Crypto in the United States Well I think when the incumbent Administration isn't working you get rid Of them and so that's my position I've Been a registered Democrat a registered Republican and a registered independent During my life but the bottom line is Right now you have Elizabeth Warren uh
Has a bill that I call it the the Bankers ban on bitcoin bill right she Calls it the anti-money laundering Bill Effectively it is a ban on self custody In the United States it's a ban on Bitcoin a ban on crypto and 20% of the US Senate is on board with This bill it was written by the bankers Jamie Diamond is the chairman of the Banking Institute and they were the ones That wrote the Bill and we know that That's not an opinion that's a fact uh Because the senator Marshall stood up at A uh at a a luncheon or something and Said yeah you know Senator Warr and I The first thing we did was go to the Bankers and say can you write this bill And so when you have the administration Literally saying we want to to end Crypto in the United States I think the Choice is being made now there are other Issues but if you are someone who says I Have the right to own an asset that I Deem good for me and my family and my Life you shouldn't be prevented from it And so that's my position on who should Who should be the next who should win The election I couldn't agree more John you know I do You I think the perfect way to kind of Wrap this up then would just be what is Your five-year outlook on this industry You know how can we vote for you when You run for Congress and take on these
People but yeah what are you just Anticipating in the markets this year Then and just wrapping up into the next Two to three years what does that look Like in your terms of crypto adoption in The US yeah I I think that the election is Very I you know I'm ultimately a bull Because Hey You Can't Ban crypto you Guys know that I know that you can make It very much difficult but I will tell You that you know if the election were To go a certain way um then you could See Senator Warren's bill being Basically approved on some level you Could actually face some kind of issue It would be in the courts and it would Go up to the Supreme Court and I think The Supreme Court would ultimately win But it could be a rough four or five Years uh in the United United States and So a lot is on stake ultimately though I'm an optimist at heart and I believe That will'll be successful I believed Strongly the judge would side for xrp Holders and she did and so I have faith In our Judicial System it's imperfect But I have faith in it so I think that Um five years from now people are going To does that mean 20,000 tokens guys are Going to be successful no but I think That the major platforms if it does Solve a problem think there's going to Be the utility era and when the utility
Era uh takes effect as opposed to the Speculation era then I think there's Going to be reason to be um positive in The in the market yeah five years should Be two Bull Run tops from now going off The foure cycle so hopefully five years From now we're all feeling pretty good But John we're feeling great that you Joined us it was a pleasure talking to You we bring up uh your your statements Your articles you're always quoted and All these crypto Publications it was Just great putting a face to the name Here John I appreciate it guys have a good one Everybody stay safe out there and we Will vote for you you let us know when I'm supporting [Music] You