Attorney John Deaton, who represents thousands of XRP holders, is leading a group of 5,000 Coinbase customers who want to intervene in the SEC lawsuit against the crypto exchange. The lawsuit challenges the SEC’s claim that Coinbase’s staking services involve unregistered securities.
The SEC alleges that Coinbase has been offering unregistered securities to its customers through its staking-as-a-service program, which allows users to earn rewards by locking up their crypto assets on certain blockchains.
However, Coinbase is not alone in this fight. Attorney John Deaton, who represents around 75,000 XRP holders in a separate lawsuit against the SEC, is also leading a group of 5,000 Coinbase customers who want to have their voice heard in the case.
Deaton has invited interested customers to join him as potential amici curiae or friends of the court, who can provide relevant information or arguments to assist the judge.
Coinbase’s motion for judgment
Coinbase has filed a motion to dismiss the SEC’s complaint, arguing that its staking services do not qualify as investment contracts and that crypto assets cannot be seen as securities.
The exchange claims that it does not act as a broker, exchange, or clearing agency for its staking customers and that it does not promise any profits or returns from its staking program.
Coinbase also asserts that the SEC’s enforcement action is arbitrary and inconsistent, as it has not taken similar actions against other platforms that offer staking services.
The exchange accuses the SEC of overreaching its regulatory authority and creating uncertainty and confusion in the crypto industry.
The federal judge overseeing the case has approved Coinbase’s request for oral arguments, which are scheduled for January 17, 2024, in New York.
The judge will hear both sides’ arguments and decide whether to grant or deny Coinbase’s motion to dismiss.
Deaton’s amicus curiae initiative
Deaton, who has been vocal about the SEC’s alleged misconduct and lack of clarity in regulating crypto assets, has launched an initiative to gather support from Coinbase customers affected by the SEC’s lawsuit.
The XRP Lawyer says that he has about 5,000 Coinbase customers who have joined him as potential amici curiae and that he is preparing to file a motion to intervene in the case on their behalf.
Deaton believes that Coinbase customers have a right to participate in the case, as they are the ones who use and benefit from the staking services that are under attack by the SEC.
He argues that the SEC’s lawsuit harms not only Coinbase but also its customers and the entire crypto community.
Deaton says that he will present evidence and arguments to show that Coinbase’s staking services are not securities and that the SEC’s action is unjustified and harmful.
He also hopes that his intervention will help persuade the judge to rule in favor of Coinbase and dismiss the SEC’s complaint.
The future of crypto regulation
The outcome of the SEC’s lawsuit against Coinbase could have significant implications for the future of crypto regulation in the US.
“I have about 5,000 Coinbase customers who have joined to participate as potential amici curiae – if the case were to continue, either in District Court or on appeal.”
Coinbase has also been seeking a legislative solution to end the SEC’s overreach, which it says is marked by an enforcement-only approach.
Prior to the hearing of US SEC Chair Gary Gensler before the US Senate Banking Committee in September 2023, Coinbase management called for a legislative resolution to avoid migration of digital asset innovation overseas.
Coinbase customers who want to join Deaton’s amicus curiae initiative can look out for updates on his Twitter account.
