Emily Walker
In a recent post on X, noted attorney John E. Deaton, an advocate for XRP, discussed the complex relationship between the US Securities and Exchange Commission (SEC) and Ripple’s competitors. He suggested that there is a coordinated effort aimed at diminishing Ripple and its cryptocurrency.
Deaton pointed out the significant repercussions of the SEC’s lawsuit on Ripple, stating, “The extent of the damage to Ripple’s business from the SEC’s broad complaint is hard to quantify.” He provided historical context, recalling how in 2012, when XRP was created, stablecoins were non-existent, and the market for cross-border payments held immense opportunity. “That opportunity still exists today,” he emphasized.
Deaton’s Perspective on Ripple’s Lawsuit
Reflecting on Ripple’s early decisions, Deaton shared insights about the pivotal discussion on whether to emphasize smart contracts or payments. He recalled that Vitalik Buterin, Ethereum’s co-founder, was living with Ripple’s former CTO, Stefan Thomas, during this period.
Ultimately, Ripple decided to concentrate on cross-border payments, which Deaton considers a wise choice due to the lack of stablecoins and the extensive potential of that market. “At that time, with no stablecoins available and the enormous size of the global cross border payments sector, their focus makes sense,” he noted.
Deaton supported Ripple’s decision by citing relevant data showing that cross-border payment transactions soared past $150 trillion in 2022 alone, making up more than 96% of total cross-border volume, with forecasts suggesting it could reach $250 trillion by 2027. This surge is attributed to growing international trade, the rise of global e-commerce, and the increasing movement of people and businesses across borders.
He also pointed out significant moments that helped promote XRP’s adoption, mentioning that after Coinbase listed XRP in February 2019, the platform actively advocated for the utility of both XRP and USDC in facilitating quick and affordable international money transfers. Additionally, MoneyGram began using XRP in June 2019.
However, the situation changed drastically when the SEC initiated legal action against Ripple in December 2021. “Following the SEC’s lawsuit, Coinbase delisted XRP, and MoneyGram transitioned to using XLM instead,” Deaton explained.
Criticizing the SEC’s tactics, Deaton questioned, “Can anyone genuinely argue that there is a significant legal distinction between MoneyGram using XLM instead of XRP?” He also pointed out the irony in the situation since XLM’s creator, Jed McCaleb, was a co-founder of Ripple and XRP.
Deaton described the SEC’s accusation as unreasonably broad, asserting, “The SEC’s complaint against Ripple and XRP stands as perhaps the most excessively broad complaint ever filed by the SEC.” He raised concerns about possible conflicts of interest, suggesting that those who advocated for the case against Ripple later joined Ripple’s competitors. “Individuals pushing for the lawsuit then went on to assist Ripple’s rivals,” he claimed.
Addressing doubts about his objectivity, Deaton clarified his financial interests. “I’ve disclosed that 80% of my wealth is in BTC. Additionally, when journalists Eleanor Terrett and Charles Gasparino reported on the case in November 2021, they indicated that I am not an uncritical supporter of Ripple; I’ve questioned Ripple’s sale of around $800 million worth of XRP,” he said.
He concluded by stating, “Examining how this case was initiated, including the significant conflicts of interest and the transition of key players to Ripple’s competitors, does not require me to be a supporter to recognize the problematic nature of the situation.”
As of the latest update, XRP was valued at $2.12.