John Deaton, the lawyer representing over 75,000 XRP holders in the ongoing Ripple-SEC lawsuit, has revealed his perception of potential SEC rug pull ahead of spot Bitcoin ETF approval.
The cryptocurrency market is at a pivotal point, as the community waits for the U.S. Securities and Exchange Commission (SEC) to approve spot Bitcoin ETFs. A favorable decision could propel the crypto industry to new heights, and although many see the approval as a done deal, some are still skeptical, expecting the SEC to backtrack.
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Earlier in the year, Grayscale Investments, the company behind the Grayscale Bitcoin Trust (GBTC), sued the SEC over its denial of its spot Bitcoin ETF application.
In August, a federal appeals court ruled in Grayscale’s favor, finding that the SEC’s denial of the spot Bitcoin ETF application was “arbitrary and capricious.”
In October, the SEC did not appeal the court ruling, effectively allowing Grayscale to resubmit its spot Bitcoin ETF application.
Deaton’s Uncertainty About ETF Approval
Despite the certainty in the market, pro-XRP lawyer John E. Deaton has raised concerns about a possible rug pull by the SEC ahead of the highly anticipated spot Bitcoin ETF approval. His apprehension stems from comments made by former SEC official John Reed Stark, who suggests that the SEC may be setting up for a surprise rejection.
With people saying the market is pricing in a 90% chance for approval for a Spot #BTC ETF, is @GaryGensler about to pull off the greatest Regulatory Rug Pull of all time? https://t.co/dUMSMkw5XU
— John E Deaton (@JohnEDeaton1) December 5, 2023
Stark points out that the SEC would not go through the stress of requiring a proviso for Bitcoin spot ETF approval and then deny the applications. However, he highlights that predicting the SEC’s decision behind closed doors is difficult.
SEC Chair Gary Gensler has been a vocal critic of cryptocurrencies, and it is unclear whether he would support the approval of a bitcoin spot ETF. However, the SEC has been under pressure from investors to approve such an ETF, and Gensler could be persuaded to do so.
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Deaton expresses the same concerns as Stark, warning that the SEC’s denial of Bitcoin ETF applications could trigger a backlash. He believes that the expectation of approval is driving Bitcoin’s surge, and surprise rejection could cause significant market disruption.
The potential for a rug pull by the SEC is particularly concerning, given Gensler’s history of taking a hard stance on Bitcoin. The market remains optimistic about a spot Bitcoin ETF approval, with a prominent member of the crypto community sharing his opinion that spot Bitcoin ETF approval will come this year.
However, Deaton’s warnings serve as a reminder of the potential for a sudden regulatory shift. Investors should exercise caution and avoid overexposure to Bitcoin in anticipation of the SEC’s decision.
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