In a recent post on X (formerly Twitter), lawyer John E Deaton claimed that the Securities and Exchange Commission’s (SEC) lawsuit against Ripple has cost the $XRP token almost three years of adoption in the US.
The regulatory watchdog had filed the case against the US-based technology company in December 2020. The SEC claimed that Ripple’s executives held an initial public offering (IPO) of $XRP. The lawsuit alleged that the token was an unregistered security at the time of raising capital. In doing so, it stated that Ripple raised funds by selling XRP tokens in unregistered security offerings to investors in the US and worldwide.
The pro-Ripple lawyer pointed to how much crypto exchange Coinbase used to promote $XRP before the lawsuit. This post came amid Coinbase’s recent announcement that it has acquired a minority stake in USD Coin ($USDC) and is now working to “unlock additional utilities and grow the USDC ecosystem”.
Deaton believes that if it had not been for SEC’s ambush on Ripple, Coinbase and other crypto exchanges might have shown similar interest in the $XRP asset, placing it on a trajectory to greater adoption.
Before the lawsuit, Coinbase used to offer cross-border payments service to enable customers to transfer funds using $XRP. It actively promoted the coin’s utility as thousands of people in the U.S. acquired the asset following this.
Coinbase’s listing of $XRP in February 2019 was a result of the exchange’s dedicated commitment to the coin and its regulatory status. It was involved in a meeting with the SEC to discuss the same. Here, Coinbase explained to the SEC that it had evaluated $XRP by running it through the exchange’s stringent regulatory framework for digital assets.
The regulatory watchdog did not object to Coinbase’s listing proposal back then. Around the same time, MoneyGram also filed a form with the SEC where it communicated how it plans to use $XRP. There was no objection from the SEC for this either.
Despite all of this, less than two years after Coinbase’s meeting and 18 months after MoneyGram’s disclosure of $XRP plans to the SEC, a lawsuit was filed against Ripple. Deaton claimed that the lawsuit is being used as a ‘weapon’ where the value and worth of $XRP is being compromised because of the same.
Because of this long-drawn case, the lawyer believes that it has been $XRP that has suffered in the last three years. If it hadn’t been for this, the lawyer questioned whether Coinbase would rather have acquired a stake in Ripple instead of Circle.
He then concluded his thread post saying that despite all of these trials, Ripple has managed to bring out a continued and impressive success outside of the U.S., which is about 95%. However, he believes that the lawsuit has definitely hurt $XRP and the development related to the $XRP ledger.
At the time of press, $XRP was struggling in the red as it changed hands for $0.517 as per CoinGecko. It has been down by over 17% in the last seven days amid the broader crypto market drawdown.
