Warren Rival for Senate Race John Deaton Argues for Coinbase in SEC Challenge

As a crypto investor and follower of the regulatory landscape, I’m encouraged by the bold stance taken by lawyer-turned-politician John Deaton in this ongoing legal battle between Coinbase and the SEC. His extensive experience in law and his strong advocacy for crypto makes him an influential voice in the digital asset community.

John Deaton, who was previously a lawyer, strongly advocated for cryptocurrencies once again on Friday. He submitted an amicus curiae (friend-of-the-court) brief in support of Coinbase Inc.’s (COIN) case before a higher American court. The brief aimed to clarify when a digital token should be classified as a security.

Deaton, who is running as a Republican candidate against Sen. Elizabeth Warren (D-Mass.), submitted an amicus brief in support of Coinbase’s case against the Securities and Exchange Commission (SEC). Coinbase had filed for an interlocutory appeal earlier this month, aiming to obtain a distinct ruling on a specific legal issue: whether a digital asset transaction without any obligation to the initial issuer should be categorized as an investment contract subject to SEC regulation.

Deaton argued that the “agency influenced by political pressures” relies excessively on its interpretation of the Howey test to label tokens as securities indefinitely, a power it does not truly possess.

“According to Deaton, the Howey test is applied on a case-by-case basis. With numerous digital assets and frequent transactions taking place across multiple blockchains, this complexity necessitates an impractical approach for the SEC. In response, they have taken an unconstitutional shortcut by deeming all token transactions as potentially violating securities laws.”

In the dispute between Ripple Labs and the US securities regulatory body, the lawyer made comments that were comparable to others in the digital asset community, thereby bolstering his standing and recognition within it.

To secure a spot in the Senate race against Elizabeth Warren, the candidate must first win the Republican primaries happening in September. However, surveys indicate that Warren holds a strong position in Massachusetts and has a high probability of being re-elected in the November general election.

Deaton is scheduled to be among the speakers next month at Consensus 2024 in Austin, Texas.