On 31 August 2023, John Deaton, a prominent, highly-respected attorney closely monitoring the U.S. SEC’s lawsuit against FinTech firm Ripple, attacked former hedge fund manager Jim Cramer’s claim (during an episode of CNBC’s “Mad Money”) that the public knows nothing about XRP.
Deaton, Managing Partner of Deaton Law Firm, is the founder of CryptoLaw, a website focusing on U.S. legal and regulatory developments for digital asset holders, and the host of the YouTube channel CryptoLaw.
Cramer hosts CNBC show “Mad Money w/ Jim Cramer“. He is also a co-anchor of CNBC’s “Squawk on the Street“, as well as a co-founder of the financial news website TheStreet.
Enron Corporation, once a leading American energy company, became infamous for one of the largest corporate fraud scandals in U.S. history. Founded in 1985 and based in Houston, Texas, the company engaged in a complex web of financial manipulations to hide debt and inflate profits, orchestrated by top executives like CEO Jeffrey Skilling and CFO Andrew Fastow. The scandal came to light in 2001, leading to Enron’s bankruptcy, the largest in the U.S. at the time, and resulting in severe financial and job losses. The fallout led to criminal convictions for key executives and catalyzed regulatory changes, including the enactment of the Sarbanes-Oxley Act in 2002 to enhance corporate governance and financial transparency.
In a post published on X on 31 August 2023, Deaton said Cramer “should be embarrassed and ashamed.”
Deaton presented a series of facts and historical context to counter Cramer’s claims. He noted that the U.S. Government Accountability Office (GAO) had already classified XRP as a “virtual currency” in a decentralized payment protocol known as Ripple as far back as 2014. In 2015, the Department of Justice (DOJ) and the Financial Crimes Enforcement Network (FinCEN) settled with Ripple, designating XRP as a “convertible virtual currency.” This settlement required Ripple to comply with U.S. banking laws, not securities laws, and to submit an auditor’s report every six months detailing all XRP sales.
Deaton also cited the Financial Stability Oversight Council’s (FSOC) 2019 annual report, which included XRP among virtual currencies like Bitcoin, Ethereum, and Litecoin that were gaining in market capitalization. This report was apparently endorsed by significant figures in the financial world, including the chairs of the SEC and CFTC, the Federal Reserve Chair, and the U.S. Treasury Secretary.
Additionally, Deaton pointed out that MoneyGram had disclosed its use of XRP for cross-border payments in a form filed with the SEC in June 2019. He also highlighted that XRP is traded on over 200 global exchanges and has received the status of a virtual currency from several countries, including the United Kingdom, United Arab Emirates, Singapore, Switzerland, and Japan.
Deaton concluded by emphasizing that Cramer could have easily verified these facts with minimal research, suggesting that his comments were either recklessly uninformed or deliberately misleading.
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