In December 2020, the US Securities and Exchange Commission (SEC) initiated a lawsuit against Ripple, resulting in XRP being stripped of support from various exchanges. John Deaton, a lawyer who supports XRP, recently expressed on X (formerly Twitter) that this marks nearly three years of XRP's presence in the US market.
Deaton's remarks coincide with Coinbase's announcement of acquiring a minority stake in USD Coin Circle, the issuer of USDC stablecoin. Coinbase intends to enhance the utility of USDC and expand its ecosystem. Deaton reflected on Ripple and XRP's extensive utilization in cross-border payments and noted that companies like Coinbase could have been similarly interested in Ripple if not for the SEC lawsuit. He emphasized how Coinbase was one of the prominent XRP facilitators until the regulatory turmoil led exchanges to delist the token.
Highlighting Coinbase's diligence, Deaton mentioned that Coinbase had contacted the SEC to confirm XRP's regulatory status before listing it. In a January 2019 meeting with the SEC, Coinbase conveyed its evaluation of XRP against rigorous digital asset regulatory criterion ia, and a senior SEC representative recommended Coinbase's approach. The SEC at that time didn't voice any opposition to Coinbase's listing plan, resulting in the exchange listing XRP in February 2019. Similarly, payment processing giant MoneyGram, a significant partner of Ripple in remittances, had consulted the SEC about its use of XRP.
Pro-XRP advocates assert that Ripple's lawsuit is being wielded as a weapon, and claim that evidence unearthed over the past three years corroborates this assertion. Despite Ripple's remarkable achievements beyond the US, Deaton noted that the lawsuit has undeniably hindered the adoption of XRP. On July 13, Judge Analisa Torres of the New York District partially ruled in favor of Ripple Labs, determining that XRP sales on digital asset exchanges don't constitute securities.
The legal battle between Ripple and the SEC continues to spark discussions about regulatory clarity for cryptocurrencies, particularly in cases where digital assets may not neatly fit into traditional definitions of securities.
