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Deaton listed previous enforcement actions taken by the SEC as evidence the regulator “does not speak on behalf of digital asset users and investors and intends to offer no regulatory guidance beyond citing the Howey case.” He cited the commission’s civil cases against Debt Box, in which he claimed the SEC was “more interested in hurting a crypto company than maintaining an allegiance to truth and justice.” A judge sanctioned the commission in that case.
Though an April 26 X post directly tied Deaton’s actions to his ongoing Senate run, he initially pitched himself as a legal representative to Coinbase customers in June 2023 — before his campaign announcement — after the SEC filed its lawsuit. An April 19 filing suggested that his latest motion to file an amicus brief was successful.
“It is extremely important for end users of the technology to be represented and not allow a biased and politically motivated agency speak for them,” said Deaton on X. “But that doesn’t mean they want Coinbase to speak for them either.”
According to Coinbase Chief Legal Officer Paul Grewal, the interlocutory appeal asked the court to consider whether the term “investment contract” — one of the bases for establishing whether something is a security under SEC rules — requires contractual obligations after a sale. The legal issue is among many at stake in the SEC’s case against the crypto exchange.
It’s unclear if Deaton’s legal work could impact his Senate campaign, with election day less than six months away. Both candidates for the Massachusetts seat in the U.S. Senate have markedly different views on digital assets. Senator Warren signed an April 25 letter calling for authorities to crack down on the use of crypto in payments for child sexual abuse material.
