In the ongoing legal battle between Coinbase and the United States Securities and Exchange Commission (SEC), pro-XRP lawyer John Deaton has accused SEC Chair Gary Gensler of gaslighting the public. Deaton claims that the SEC's stance in the Coinbase rulemaking dispute contradicts Gensler's previous statements made during his congressional testimony earlier in 2023.

The dispute stems from Coinbase's crypto rulemaking petition, which was recently rejected by the SEC for several reasons. These reasons include the application of current securities laws to cryptocurrencies, the SEC's engagement with crypto securities markets through rulemaking, and the importance of preserving the commission's discretion in establishing its rulemaking priorities.

Deaton took to social media platform X (formerly Twitter) to emphasize Gensler's statement outlining the SEC's decision. Gensler stated that "there is NOTHING unique or new about cryptocurrencies" and expressed skepticism about the distinctiveness of the crypto ecosystem in terms of asset volatility and the classification of assets as securities under existing laws.

According to Deaton, this position directly contradicts Gensler's earlier testimony where he acknowledged the unique nature of cryptocurrencies and the regulatory gap they present. Deaton believes that Gensler's complete reversal on the issue is politically motivated and influenced by support from Senator Elizabeth Warren.

Deaton also pointed out that Coinbase's rulemaking request was based on the SEC's previous communications, suggesting that Gensler's changing stance has caused confusion and uncertainty within the crypto industry.

The SEC's approach to the cryptocurrency ecosystem has been mired in inconsistency and contradiction. While taking legal action against Coinbase and Binance, the regulatory body surprisingly chose not to appeal its defeat in a case against Grayscale Investments. The case revolved around Grayscale's attempt to convert its Grayscale Bitcoin Trust into a spot exchange-traded fund.

As the legal battle between Coinbase and the SEC continues to unfold, market participants and industry experts are closely watching for any developments that could shape the future of cryptocurrency regulation in the United States.