Attorney and XRP advocate John Deaton recently emphasized the profound impact the SEC’s lawsuit against Ripple and XRP has had on Ripple’s business operations. Reflecting on the circumstances leading to the creation of XRP in 2012, Deaton highlights that stablecoins were non-existent at that time and the market for global payments was ripe for innovation.
During the formative years, Ripple faced a pivotal decision regarding whether to concentrate on smart contracts or cross-border payments. Ultimately, they chose the latter, recognizing the significant potential of the market and the absence of stablecoins.
Fast forward to 2019, when Coinbase listed XRP, touting it as a quick and affordable solution for international money transfers. Soon after, MoneyGram began leveraging XRP for its transactions. Just a mere 18 months later, everything changed as the SEC took legal action, asserting that all XRP—irrespective of purchase method—constituted an unregistered security.
Deaton expressed his belief that accurately measuring the damage inflicted by the SEC’s broad complaint against Ripple and XRP is nearly impossible. He reminded everyone that back in 2012, the cross-border payments landscape was vastly different, as stablecoins had yet to emerge.
Following the lawsuit, Coinbase promptly delisted XRP, and MoneyGram made the switch to XLM for its transfers. Deaton raises an important question: is there any genuine legal distinction between utilizing XRP or XLM for payments? After all, XLM’s creator, Jed McCaleb, is also a co-founder of Ripple. He argues that the SEC’s case against Ripple is excessively expansive and brings to light the uncomfortable reality that several key individuals advocating for the lawsuit later transitioned to positions within Ripple’s competitors.
“When you examine the conditions surrounding the filing of this case, including significant conflicts of interest, and the connections of those behind the lawsuit to competitors of Ripple/XRP, it becomes clear that there’s a lot that warrants scrutiny,” he stated.
The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission continues to influence the trajectory of XRP since the lawsuit commenced in December 2020. A notable development occurred on July 13, 2023, when Judge Analisa Torres determined that XRP is not a security, marking an important regulatory milestone. Yet, the SEC’s appeal on October 17 challenged portions of that ruling. As the SEC is expected to submit its opening brief by January 15, 2025, the implications of this case remain a frequent topic in public discourse.
This situation generates a mixture of frustration and hope among the crypto community. The sentiment surrounding Ripple’s saga illustrates the complex web of competition, regulation, and innovation. As XRP holders and supporters await the final verdict, one thing remains clear: the outcomes of this lawsuit could significantly shape the future of digital currencies and the broader blockchain landscape.
