In a recent development, John Deaton, a prominent attorney and advocate for XRP, has publicly criticized the U.S. Securities and Exchange Commission (SEC), alleging that the regulatory agency’s actions have significantly hindered XRP’s potential for widespread adoption.
You could NEVER underestimate the damage the SEC’s lawsuit has caused – NOT ONLY AGAINST RIPPLE – BUT #XRP. THREE YEARS OF ADOPTION – that’s what it’s caused.
Just how long is 3 yrs – in crypto years?
People seem to forget how much Coinbase promoted #XRP before the lawsuit.… https://t.co/1fZ3r8WCSd pic.twitter.com/GLu4kFUU38
— John E Deaton (@JohnEDeaton1) August 22, 2023
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Coinbase’s recent acquisition of a stake in Circle has fueled Deaton’s argument. He suggests that if XRP hadn’t been mired in legal challenges resulting from the SEC lawsuit, Coinbase might have chosen to acquire a stake in Ripple instead of Circle.
Deaton draws attention to the fact that Coinbase had engaged SEC attorneys in January 2019, proactively seeking guidance before listing XRP a month later in February.
The point here is this: What could have happened regarding adoption of #XRP during the last 3 years, if the lawsuit was never filed? 🤷♂️
Would Coinbase today be announcing it acquired a stake in Ripple, instead of @circle? 🤷♂️
But I do know, despite Ripple’s continued and… https://t.co/pGzOaWsGZX
— John E Deaton (@JohnEDeaton1) August 22, 2023
Coinbase simultaneous listings of XRP and Circle’s USDC in 2018 and 2019, respectively, offered transaction speeds of 3-5 seconds and 10-12 seconds. Deaton highlights this timeline to emphasize his criticism of the SEC in light of Coinbase’s recent move to partner with Circle and integrate Circle’s USDC stablecoin into six new blockchains.
While the specifics of the partnership were not indicated in the press release, Circle hinted at integrating Polkadot, Cosmos, Near, and Optimism in collaboration with Coinbase by the end of 2023. Deaton underscores the fact that MoneyGram began utilizing XRP in its cross-border payments system six months after Coinbase listed the cryptocurrency.
It is noteworthy that Coinbase took due diligence measures in 2019 by actively seeking a meeting with the SEC to discuss the classification of XRP as a digital asset rather than a security. Coinbase expressed its willingness to list XRP contingent upon SEC compliance. As Deaton points out, SEC lawyers did not raise any objections to XRP during their discussions with Coinbase.
Deaton emphasizes the reasonableness of the SEC’s lack of objection, considering they had analyzed XRP against all aspects of the Howey test six months prior and concluded that XRP did not meet the criteria for a security. Had XRP failed the Howey Test, the SEC would have likely recommended a cease or desist order. However, Coinbase listed XRP without interference from the SEC on February 25, 2019.
Read Also: Ripple Joins Bank for International Settlements (BIS) For Payments Taskforce. Can XRP Benefit?
Over the following months, Deaton asserts that Coinbase actively promoted both XRP and USDC, positioning these digital assets as innovative solutions at a time when traditional bank transfers took days to process.
In a surprising turn of events, former SEC chairman Jay Clayton filed a lawsuit against Ripple, alleging that XRP constituted illegal securities. This contradicted the SEC’s prior approval of MoneyGram International Inc’s use of XRP in its cross-border payments system 18 months before the lawsuit.
Deaton concludes by emphasizing that the legal challenges faced by XRP have had a detrimental impact on the potential advantages and adoption that the cryptocurrency could have experienced.
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