SEC vs Ripple Lawsuit: The Cost of Legal Battle on XRP Adoption, According to Lawyer
In a recent post on X (formerly Twitter), lawyer John Deaton, known for his support of XRP, argued that the lawsuit filed by the United States Securities and Exchange Commission (SEC) against Ripple in December 2020 has hindered the adoption of the XRP token in the United States for nearly three years. Deaton’s comments came after Coinbase announced its acquisition of a minority stake in USD Coin (USDC) issuer Circle and its commitment to expanding the USDC ecosystem.
Deaton emphasized that Ripple and XRP were on a promising path of adoption in cross-border payments. If not for the SEC lawsuit, major platforms like Coinbase might have shown similar interest in Ripple. The lawyer also pointed out that Coinbase was one of the cryptocurrency exchanges that actively promoted XRP before the lawsuit forced them to delist the token.
Furthermore, Deaton highlighted how Coinbase had conducted due diligence and reached out to the SEC to confirm the regulatory status of XRP before listing it. The SEC did not raise any objections to the listing proposal, and Coinbase listed XRP in February 2019. MoneyGram, another significant partner of Ripple in the remittance industry, also filed a form with the SEC to disclose its use of XRP without facing any objections from the regulator.
According to Deaton, it is evident that Ripple’s partners, including MoneyGram and Coinbase, determined that XRP was not a security based on their legal teams’ evaluations. However, despite these measures, the SEC filed a lawsuit against Ripple in December 2020. Deaton strongly believes that the lawsuit was used as a weapon, as evidenced by the accumulated evidence over the past three years.
Although Ripple has achieved considerable success outside the United States, the lawsuit has certainly hindered XRP’s adoption. On July 13, 2023, Judge Analisa Torres of the New York District Court ruled partially in favor of Ripple Labs, stating that XRP sales on digital asset exchanges do not constitute a security.
Impact on XRP Adoption
The SEC vs Ripple lawsuit has had a profound impact on the adoption of XRP in the United States. Here are some key insights:
- The lawsuit has deprived XRP of approximately three years of potential adoption in the United States.
- Major crypto exchanges, like Coinbase, delisted XRP as a result of the lawsuit, hindering its exposure to a wider user base.
- Ripple’s partners, such as MoneyGram, had plans to utilize XRP, but the lawsuit created uncertainty and deterred widespread adoption.
- The lawsuit has created a negative perception of XRP among potential investors and users, impacting its reputation and market value.
Despite the setbacks caused by the lawsuit, Ripple has continued its success outside of the United States. It remains to be seen how the legal battle will further unfold and whether XRP’s adoption in the US can recover.
The SEC vs Ripple lawsuit has undeniably impacted the adoption of XRP in the United States. The legal battle has caused significant disruptions and uncertainty in the crypto industry. While Ripple has been resilient in navigating through these challenges, it is crucial for regulators and industry players to work together to establish clear guidelines and foster innovation in digital asset regulations.
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