John Deaton, a lawyer popular among crypto circles online, recently shared his take on the importance of disclosure by crypto whales regarding their token holdings. The crypto lawyer cited Ripple and the transparent methods adopted by the crypto giant to keep its clients informed about its XRP holdings.
John Deaton took to Twitter earlier today to respond to a crypto influencer advocating for token disclosures by crypto whales:
Crypto influencer Gabriel Shapiro stated that crypto investors with significant token holdings should identify themselves. Shapiro added that such token holders should also disclose the percentage of total supply held or controlled by them directly or indirectly. According to the crypto influencer, this was one of the few KYC-type procedures in crypto that could help assess the degree of centralization of tokens and systems.
John Deaton agreed with Shapiro and cited the case of Ripple, the crypto giant behind XRP. Ripple had implemented a cryptographic escrow which locked up 55 billion XRP into a series of escrow accounts. The locked XRP made up 55% of the token’s total possible supply. This method helped Ripple provide predictability to the XRP supply and controlled the token’s release. Deaton added that Ripple also published XRP reports every quarter, which informed clients about XRP sales
However, Deaton stated that such transparency would be better suited for a market with a proper regulatory regime in place. The crypto lawyer pointed out that the U.S. Securities and Exchange Commission had used Ripple’s transparency surrounding XRP in the lawsuit against the crypto firm and its CEO, Brad Garlinghouse.
John Deaton also cited a previous statement from former SEC Director William Hinman. According to Hinman, the lack of transparency surrounding the supply and ownership of Ether (ETH) prevented the SEC from calculating how much ETH was held by core parties like Vitalik Buterin, Joseph Lubin, and Consensys.
