Deaton Fires Back at Bitcoin Maxi for Claiming XRP is a ‘Centrally Controlled Security’

• John Deaton responds to criticism that XRP is a centrally controlled security.
• He cites his legal battle against the SEC and offers to clarify securities law.
• The debate highlights ongoing uncertainty surrounding crypto regulation.

Pro-XRP attorney John Deaton has dismissed criticism that claims that XRP “is a centrally controlled security.” Deaton’s pushback came in response to Jason Calacanis, a crypto commentator, who asserted XRP shouldn’t get the same treatment as Bitcoin.

Calacanis claimed that securities laws would become meaningless if the SEC allowed XRP to trade freely. He warned that startups and funds could take advantage of this by offloading large token supplies onto retail investors while keeping control over the majority. Calacanis doubled down, suggesting XRP should only be for savvy investors who truly grasp the potential downsides.

Deaton, who famously challenged the SEC’s stance against XRP and won, dismissed Calacanis’s concerns. Showing his legal chops, Deaton pointed out that a federal judge appointed by former President Barack Obama cited his legal efforts in the ruling 2023 that favored XRP.

Adding a bit of playful challenge, Deaton mentioned he’d be happy to school Calacanis on securities law, should he be interested. “But he may prefer to issue [FUD] statements like this one, unchallenged, to further promote potential bias,” Deaton said.

XRP Commodity Status Under FIT21 Bill

The debate over XRP’s classification has expanded beyond the SEC case, with new discussions emerging around the FIT21 Bill, a proposed regulatory framework for digital assets. 

Crypto analyst MoneyGCC raised concerns about whether XRP meets the decentralization standards required for commodity classification.

According to MoneyGCC, 70% of XRPL’s UNL validators receive funding directly or indirectly from Ripple Labs. At the same time, the company controls over 40% of the token supply. These facts, MoneyGCC argued, make you wonder if XRP can truly be called a commodity under the law.

In response, another commentator, “Straightup,” defended XRP’s decentralization, stating that Ripple does not control the XRP Ledger. The individual pointed out that validators operate independently and that the UNL list is customizable. 

Related: XRP Not a Security: Ripple Celebrates Landmark Ruling, Warns of SEC Overreach

Furthermore, Straightup emphasized that XRP’s supply is controlled through an escrow mechanism, preventing Ripple from manipulating the market. He referenced Ethereum’s pre-mined ICO and the SEC’s legal loss against XRP in secondary markets as precedents supporting XRP’s commodity classification.

XRP Regulatory Status Remains Under Scrutiny

This whole back-and-forth underlines the bigger mess of crypto regulation. While Bitcoin is widely recognized as a commodity, XRP’s classification has been disputed for years. In 2023, a U.S. court ruled that XRP is not a security. Yet, critics often overlook this fact when attacking XRP.

Related: XRP Braces for SEC Meeting—Policy Shift, Appeal Fate & Price Reaction in the Balance

Crypto Industry Demands Clearer Rules

The Deaton-Calacanis showdown is a microcosm of the crypto industry’s wider cry for clear, consistent regulations. Many crypto advocates argue that existing securities laws are outdated and poorly suited for digital assets. They call for tailored regulations that balance investor protection with innovation.

Under previous leadership, the SEC maintained that many tokens, besides Bitcoin, could qualify as securities. This position has led to multiple lawsuits against crypto companies. However, under new leadership, efforts are ongoing to clarify crypto rules.