Lawyer John Deaton is launching a class action lawsuit to fight allegations that Ethereum is a security.
The managing partner of the Deaton law firm posted a link to a Google Docs form for concerned investors to sign up.
Ethereum investors feel the heat
On March 9, New York Attorney General Letitia James filed a lawsuit against KuCoin, alleging that the exchange has been operating illegally in her state, including offering unregistered securities.
James directly named Ethereum, LUNA, and TerraUSD as securities, thus pushing for the court system to determine the status of his securities.
In June 2018, former SEC head William Hinman gave a speech in which he gave his opinion that Bitcoin and Ethereum are not securities. The market took this to mean that the SEC had given the green light to the two largest cryptocurrencies.
“Based on my understanding of the current state of Ether, the Ethereum network and its decentralized structure, the current offers and sales of Ether are not securities transactions.”
However, in the SEC’s ongoing lawsuit against Ripple, it was called into question that Ethereum was not a security. The fair notice defense holds that the XRP token is similar to Bitcoin and Ethereum, and without fair notice to the contrary, they had no reason to believe that they violated securities laws by selling XRP tokens.
Under questioning, Hinman said the speech was “intended to express my own personal views” and was not reflective of agency policy, thus leaving the door open on the state of Ethereum’s securities.
Hinman was found to have a conflict of interest through a former employer, Simpson Thacher, who is a member of the Ethereum Enterprise Alliance.
john deaton weighs
Deaton spearheaded a class action lawsuit against the SEC, alleging that the agency’s enforcement action against Ripple had harmed XRP investors. More than 70,000 people joined the lawsuit.
Since enforcement began, Deaton has been a pivotal figure in bringing the SEC to task, including filing for intervention to represent the interests of XRP holders in court.
A degree of animosity built between the XRP and Ethereum communities over the perceived special treatment of the former. A tweet from the Ethereum co-founder Vitalik Buterin in December 2020 he summarized this situation:
“It looks like the Ripple/XRP team is sinking to new levels of weirdness. They claim that their shitcoin should not be called a security for *public policy reasons*, i.e. because Bitcoin and Ethereum are “controlled by China”.
However, with Ethereum now in the line of fire, @elosoabebull He called it “perfect karma.”
Commenting on past animosity, deaton framed the situation and his willingness to help the ETH community by operating in a united front against the SEC.
the more cleared up that it is about helping people, regardless of their affiliation with the crypto community.
“Sorry, but some people are missing the point. I don’t care about “ETH people” just like I don’t care about “Ripple people”.
