Pro-Ripple attorney and crypto lawyer John Deaton has sent an open challenge in response to the latest video message from Gary Gensler, the Chairman of the United States Securities and Exchange Commission (SEC) in which he reprimanded startups operating in the crypto ecosystem for falsely tagging their products as non securities.

In the challenge, John Deaton said he wants the SEC to “cite a single case in the 76yrs since Howey was decided that says: 1) the underlying asset used in an investment contract is itself a security; or 2) the subsequent sales of an investment contract are also securities b/c of the first sale.”

The debate bordering on what constitutes security and what does not has caused a lot of division between players in the digital currency ecosystem and the SEC. Thus far this year, the commission has taken its enforcement action to a lot of crypto firms.

The regular imposed a $32 million fine on Kraken exchange for offering staking products which it termed securities. Besides this, the Binance USD (BUSD) stablecoin issuer, Paxos Trust was also issued a Well Notice concerning the token and the firm has subsequently halted the issuance of the product.

Providing Answers to Salient Questions

Known as a very vocal advocate for crypto firms, John Deaton has gained popularity for filing Amicus Briefs in the ongoing lawsuit between the SEC and Ripple Labs Inc on behalf of about 75,000 XRP holders.

In this current challenge, he called out the SEC to “cite ONE CASE in U.S. history in #XRPHolders’ Amicus Brief,” and he noted that “the SEC could not meet the challenge because there is not a single case.”

The industry has often advocated for dialogue and Coinbase has even taken the bar further by filing a lawsuit on the regulator for failing to provide a clear guideline for the emerging market.

Proponents of a new law believe failure to narrow the definition of the guiding rules for the market can make the United States take a back seat in comparison to other nations as far as crypto and general financial innovation is concerned. 

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