John Deaton, a well-known attorney representing thousands of XRP holders in the ongoing lawsuit between Ripple and the United States Securities and Exchange Commission (SEC), has invited Ethereum holders to join a class action against KuCoin. The cryptocurrency exchange was recently sued by a New York state regulator for allegedly selling unregistered securities.
Deaton, the founder of CryptoLaw, tweeted on Friday that if the SEC had declared Ethereum to be a security, he would have defended it, as he did with XRP. He went on to say that authorities are “out of control” and that retail holders must stand up for themselves.
#ETH is NOT a security. Had the SEC claimed #ETH was a security, I would’ve acted just as I did over #XRP. These regulators are out of control. Retail holders need to speak for themselves. If you are an #ETH holder and want to fight back sign up below.
— John E Deaton (@JohnEDeaton1) March 10, 2023
👇https://t.co/EjsD0ZHwOG https://t.co/CzlYILFdYp
Among the unregistered securities listed in the case was Ethereum (ETH), which is largely viewed by regulators such as the Commodities Futures Trading Commission (CFTC) as a commodity.
If Ethereum is branded security, the NYAG’s action may have huge ramifications for the cryptocurrency industry, fundamentally changing how cryptocurrencies are traded in the United States.
Deaton feels that Ethereum is not a security and provides a means for Ethereum holders to fight back: “If you are an ETH holder and want to fight back, sign up below,” he added, linking to a paper titled “Ethereum is not a security class action.”
Deaton has frequently asserted that Bitcoin, Ethereum, and XRP are all alphanumeric sequences or software codes. He has also frequently stated that just because an asset may be packaged, sold, or promoted as a security does not mean the underlying asset is one.
Deaton is not alone in his concern about the legal position of Ethereum. Jeremy Hogan, another attorney who has constantly monitored the Ripple SEC lawsuit, said he was not surprised by the new Kucoin lawsuit since he had warned about the “security” risks inherent in Ethereum’s transfer to proof of stake, or ETH 2.0, approximately a year ago.
