The crypto landscape is becoming a legal battleground, with heavyweight attorney John Deaton joining the fray. Deaton, well-known for representing a clutch of XRP token holders in their lawsuit against the SEC (Securities Exchange Commission), has now emerged in the LBRY lawsuit as amicus curiae (friend of the court). Revealed in a document submitted on Sept. 14, 2023, to the United States Court of Appeals for the First Circuit, Deaton undertakes this role on behalf of Naomi Brockwell, founder of Crypto Law, a platform dedicated to reporting on legal and regulatory advancements affecting cryptocurrencies in the US. Known for advocating for crypto investors, Deaton is regularly at the forefront of legal proceedings and debates surrounding the industry’s regulation.
This turn of events comes after the SEC initiated legal proceedings against LBRY, a content sharing and publishing platform, back in March 2021. The SEC accused LBRY of unlawfully selling LBC tokens without legal registration. On Sept. 7, LBRY fired back with a notice of appeal. The final judgement in July 2023 ordered LBRY to pay a civil penalty and prohibited it from participating in unregistered crypto asset securities offerings henceforth. While some viewed this case as showcasing potential implications for the XRP lawsuit, the judgment in Ripple’s favor, coming only a week later, expressed the contrary.
Debate reaches boiling point with the SEC alleging Binance.US of non-cooperation in their ongoing investigation. The SEC claims that Binance.US’s holding company, BAM, has submitted merely 220 documents during the discovery process, many of these apparently unintelligible and incomplete. It charges BAM with refusal to produce pertinent witnesses for deposition, instead agreeing only to four depositions of witnesses it deems fitting, and arguing blanket objections to the production of relevant communications.
Adding fuel to the flames, the SEC reports discrepancies in BAM’s statement vis-a-vis its use of Ceffu, wallet custody software provided by global entity Binance Holdings Ltd. It started off claiming that Ceffu was BAM’s wallet custody software and services provider but later stated that Binance was BAM’s wallet custody software provider.
As the SEC delves deeper into the workings of Binance, it maintains that the platform’s usage of Ceffu may infringe an existing agreement designed to prevent funds diversion abroad. Amidst such escalating legal scrutiny, Binance.US CEO Brian Shroder, along with heads of legal and the exchange’s chief risk officer, submitted their resignations.
While the shroud of skepticism lingers on, the legal discourse surrounding cryptocurrency continues to ebb and flow, indicating a future where regulatory mechanisms will be central to the crypto universe’s very existence and operational integrity.
Source: Cointelegraph
