In a post on X, prominent XRP attorney, John E. Deaton, shed light on the complex dynamics between the US Securities and Exchange Commission (SEC) and Ripple’s competitors, suggesting a concerted effort to undermine the company and its digital asset.
Deaton emphasized the significant impact of the SEC’s case on Ripple, saying, “I don’t believe anyone can properly quantify the damage to Ripple’s business caused by the serious nature of the SEC’s complaint against Ripple.” He emphasized the historical context, saying, “You have to remember, in 2012, when the founders of Ripple created XRP, stablecoins did not exist and the cross-border payment market was open and ripe for such disruptive technologies. Obviously, it still is today.”
Details From Deaton In XRP Lawsuit
Reflecting on Ripple’s strategic decisions during its early operations, Deaton recalled a key debate about whether Ripple should prioritize smart contracts or payments. He showed an interesting anecdote from that time: Vitalik Buterin, the founder of Ethereum, lived with Ripple’s then-CTO, Stefan Thomas.
In the end, Ripple chose to focus on cross-border payments, a move that Deaton views as strategic given the absence of stablecoins and the huge potential of the global cross-border payments market. “Considering stablecoins didn’t exist at the time and, considering how big and sizeable the global cross-border payments market was, I can see why,” Deaton explained.
Supporting Ripple’s strategic focus, Deaton points to data showing strong growth in cross-border payment flows. In 2022, these transactions exceeded 150 trillion, accounting for more than 96% of the cross-border payment volume, with projections up to $250 trillion in 2027. and increased cross-border movement of individuals and businesses.
Deaton also highlighted key early milestones that supported the adoption of digital assets. “After Coinbase listed XRP in February 2019, Coinbase promoted the use of both XRP and USDC to transfer money internationally, in seconds, and almost for free. In June 2019, MoneyGram started using XRP,” he said.
However, the narrative changed dramatically when the SEC filed a lawsuit against Ripple in December 2021. “After the lawsuit was filed by the SEC, Coinbase removed XRP and MoneyGram switched from using XRP and started using XLM instead,” Deaton said.
Criticizing the SEC’s approach, Deaton noted, “Is anyone going to argue that there was a real difference, UNDER THE LAW, between MoneyGram using XLM over XRP?” He pointed out the irony in the SEC’s actions, noting, “The founder of XLM, Jed McCaleb, is also the founder of Ripple & XRP!”
Deaton described the SEC’s complaint as extremely broad, saying, “The SEC’s complaint against Ripple and XRP is, without a doubt, the most comprehensive complaint the SEC could ever file.” He also accused the SEC of potential conflicts of interest, pointing out that the people involved in the case had become involved with Ripple’s competitors. “Then the same people who forced the case against Ripple to be filed, continue to work as Ripple’s competitors,” he asserted.
Addressing doubts about his motives, Deaton clarified his financial interests and independence. “First, as I disclosed in the FEC filing, 80% of my net worth is in BTC. Second, when Eleanor Terrett and Charles Gasparino did their major report on the case in November 2021, they wrote: ‘Deaton is not a fan of Ripple. He criticizes the fact that Ripple itself has sold almost 800 million dollars …’ ”
He concluded, “But when you look at the circumstances surrounding the way this lawsuit was filed, including a serious conflict of interest, and the fact that people on the other side of the lawsuit continued to help or work for Ripple’s competitors, you don’t have to be a fan of calling it.”
At press time, XRP traded at $2.12.
Featured image from YouTube, chart from TradingView.com