The lawsuit initiated by the United States Securities and Exchange Commission against Ripple in December 2020 has resulted in a setback of nearly three years for the adoption of the XRP token, currently valued at $0.52. This insight was shared by pro-XRP attorney John Deaton in a recent post on the platform X (formerly known as Twitter).
Deaton’s observations emerged in the context of Coinbase’s announcement about acquiring a minority stake in Circle, the issuer of the USD Coin (USDC) valued at $1.00, and their plans to enhance the USDC ecosystem. The attorney contemplated how Ripple and its XRP token were poised for substantial growth in cross-border payments. If it weren’t for the SEC lawsuit, platforms like Coinbase might have exhibited similar interest in collaborating with Ripple.
The advocate supporting XRP’s interests underscored that prior to the legal action, Coinbase played a significant role in promoting XRP, until the lawsuit compelled the cryptocurrency exchange to remove the token from its platform.
Deaton highlighted that Coinbase conducted thorough research and even engaged with the SEC to ascertain the regulatory standing of XRP before making it available for trading. During a meeting with the SEC in January 2019, Coinbase clarified its evaluation of XRP based on its comprehensive regulatory framework for digital assets—a framework that had previously received praise from a senior SEC staff member.
At that time, the SEC did not raise any objections to Coinbase’s proposal for listing XRP. Consequently, the cryptocurrency exchange proceeded to list the XRP token in February 2019. Likewise, MoneyGram, a prominent payment processing company and a significant partner in Ripple’s remittance endeavors, also submitted documentation to the SEC outlining its intentions regarding XRP usage. MoneyGram encountered no objections from the SEC in this matter either.
Deaton emphasized that it was evident that the legal teams at both MoneyGram and Coinbase had reached the conclusion, much like the SEC enforcement lawyers did in June 2018, that XRP did not qualify as a security. Nevertheless, despite the meticulous actions undertaken by Ripple’s partners, the SEC proceeded to file a lawsuit against Ripple in December 2020.
The lawyer advocating for XRP’s interests asserted that Ripple’s legal case was wielded as a tool, stating that “the evidence amassed over the past 3 years substantiates this assertion.” He concluded that despite Ripple’s ongoing accomplishments beyond the borders of the U.S., the lawsuit unquestionably impeded the adoption of XRP. On July 13, Judge Analisa Torres of the New York District Court issued a partial ruling in favor of Ripple Labs, determining that the sale of XRP on digital asset exchanges does not fall under the classification of a security.