Lawyer John E. Deaton, in an article published today on X, revealed that the Securities and Exchange Commission (SEC) lawsuit against Ripple in December 2020 deprived XRP of approximately three years of adoption in the United States. During the time the lawsuit was filed, Coinbase and MoneyGram attorneys also claimed that XRP was not a security.
Deaton’s comments came when Coinbase announced that it had acquired a minority stake in Circle, the issuer of USD Coin (USDC), and would work to “unlock token services and expand the USDC ecosystem.” The lawyer stated that Ripple and XRP were on a trajectory of significant adoption in cross-border payments, and if it weren’t for the SEC lawsuit, Coinbase could have shown similar interest in Ripple.
The XRP advocate reminded the community that Coinbase was one of the biggest supporters of XRP before forcing the crypto exchange to delist XRP. Deaton stated that Coinbase had exercised due diligence and even reached out to the SEC to verify its regulatory status before listing XRP. In a January 2019 meeting, Coinbase disclosed that it evaluated XRP based on a strict regulatory framework for digital assets, and a senior SEC personnel had explicitly complimented Coinbase on the same framework.
At that time, the SEC did not object to Coinbase’s listing proposal and the crypto exchange subsequently listed XRP in February 2019. Similarly, MoneyGram, a payment system giant and a significant Ripple partner, also submitted a form to the SEC outlining how they planned to use XRP. MoneyGram also did not face any objections from the SEC.
Deaton said, “The lawyers at MoneyGram, just like Coinbase’s lawyers and the SEC enforcement lawyers in June 2018, clearly determined that XRP was not a security.” However, despite all the necessary measures taken by Ripple partners, the SEC filed a lawsuit against Ripple in December 2020.
The XRP advocate claimed that Ripple’s lawsuit was being used as a weapon and said, “All the evidence that has emerged in the past three years proves that this is true.” Despite Ripple’s ongoing impressive success outside of the US, it was concluded that the lawsuit had definitely hindered the adoption of XRP. On July 13, Judge Analisa Torres of the Southern District of New York partially ruled in favor of Ripple Labs, stating that the sale of XRP on digital asset exchanges was not a security.