In a post on X, prominent pro-XRP attorney, John E. Deaton, shed light on the intricate dynamics between the US Securities and Exchange Commission (SEC) and Ripple’s competitors, suggesting a coordinated effort to undermine the company and its digital asset.
Deaton emphasized the extensive impact of the SEC’s lawsuit on Ripple, stating, “I do not believe one can properly estimate the damage to Ripple’s business caused by the sweeping nature of the SEC’s complaint against Ripple.” He underscored the historical context, noting, “You have to remember, in 2012, when Ripple founders created XRP, stablecoins did not exist and the cross border payments market was wide open and ripe for such disruptive technology. Clearly, it still is today.”
Insights from Deaton On The XRP Lawsuit
Reflecting on Ripple’s strategic decisions during its early operations, Deaton recalled the significant debate over whether Ripple should prioritize smart contracts or payments. He pointed out an interesting anecdote from that period: Vitalik Buterin, the co-founder of Ethereum, was residing with Ripple’s then-CTO, Stefan Thomas.
Ultimately, Ripple opted to focus on cross-border payments, a move Deaton views as strategic given the absence of stablecoins and the vast potential of the global cross-border payments market. “Considering stablecoins did not exist at the time and, considering just how large the global cross border payments market was and is, I can see why,” Deaton explained.
Supporting Ripple’s strategic focus, Deaton referenced data indicating the exponential growth of cross-border payment flows. In 2022, these transactions surpassed $150 trillion, accounting for over 96% of the overall cross-border payment volume, with projections reaching $250 trillion by 2027. This growth is driven by the expansion of international trade, the rise of global e-commerce, and increased mobility of individuals and businesses across borders.
Deaton also highlighted key milestones that initially bolstered the digital asset’s adoption. “After Coinbase listed XRP in February 2019, Coinbase promoted both XRP and USDC’s utility in moving money internationally, in seconds, and practically for free. In June 2019, MoneyGram began utilizing XRP,” he stated.
However, the narrative took a dramatic turn when the SEC filed a lawsuit against Ripple in December 2021. “After the lawsuit was filed by the SEC, Coinbase delisted XRP and MoneyGram switched from using XRP and began using XLM instead,” Deaton recounted.
Critiquing the SEC’s approach, Deaton remarked, “Is anyone out there really 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, “XLM’s founder, Jed McCaleb, is also the co-founder of Ripple & XRP!”
Deaton characterized the SEC’s complaint as excessively broad, stating, “The SEC’s Complaint against Ripple and XRP is, without question, the most grossly over-broad Complaint possibly ever filed by the SEC.” He further accused the SEC of potential conflicts of interest, revealing that individuals involved in the lawsuit subsequently aligned themselves with Ripple’s competitors. “Then those same people who pushed for the case against Ripple to be filed, went on to work with or for Ripple’s competitors,” he asserted.
Addressing skepticism about his motivations, Deaton clarified his financial interests and independence. “First, as I disclosed in FEC filings, 80% of my net worth is in BTC. Second, when Eleanor Terrett and Charles Gasparino did their big write-up on the case in November 2021, they wrote: ‘Deaton is certainly no Ripple fanboy. He is critical of the fact that Ripple itself has sold about $800 million …’”
He concluded, “But when you look at the circumstances surrounding how this case was filed, including the massive conflicts of interests, and the fact that people behind the lawsuit went on to help or work for competitors of Ripple, you don’t have to be a fan to call it out.”
At press time, XRP traded at $2.12.
