The SEC lawsuit against Ripple over the sale of XRP has caused a significant dent in the XRP’s trajectory. What could have been three years of flourishing adoption has instead turned into an ongoing legal struggle, leaving many stakeholders questioning the decisions and the fallout of the regulatory body.
The SEC’s Unseen Blow: Ripple’s Three Lost Years
John Deaton, founder of CryptolawUS and a prominent lawyer, wasn’t afraid to call out the damage done by the SEC’s misguided crusade against Ripple and XRP. A series of tweets listed the details of the SEC’s actions, pointing out that the lawsuit has hindered three years of adoption for XRP.
Just how long is three years in crypto years? It might as well be a lifetime, considering the pace at which the crypto world evolves.
The Coinbase Connection: So Much for Due Diligence
Coinbase, a major U.S. cryptocurrency exchange, had been a significant promoter of XRP before the lawsuit. Deaton highlighted how, in 2019, Coinbase meticulously evaluated XRP and determined it was not a security. The company even met with the SEC to discuss the regulatory status of XRP, receiving no objections.
Despite doing everything by the book, the SEC’s subsequent lawsuit against Ripple created a ripple effect that impacted Coinbase’s plans and the broader XRP market.
MoneyGram and Other Stakeholders: The Broad Impact
The SEC’s lawsuit had a broader impact, as even companies like MoneyGram, which had begun using XRP for cross-border payments, were affected. Like Coinbase, MoneyGram’s lawyers had determined that XRP was not a security.
The conclusion is clear: various experts across different organizations, including the SEC’s enforcement lawyers, believed that XRP was not a security. But the lawsuit’s filing told a different story.
What Could Have Been: Ripple’s Stunted Growth
Deaton’s intense scrutiny draws attention to a sobering question: What could have happened regarding the adoption of XRP during the last three years if the lawsuit had never been filed?
Would Coinbase today be announcing a stake in Ripple instead of Circle? The landscape might have looked drastically different. Despite Ripple’s continued and impressive success, the lawsuit has undoubtedly hindered XRP’s development and the broader ecosystem related to the XRPLedger.
And you know what’s the real kicker here? The SEC’s own lawyers didn’t think XRP was a security. Let that sink in. The legal tangle between the SEC and Ripple serves as a case study in regulatory confusion and overreach.
Three years. That’s how long the SEC has managed to hold back one of the most promising cryptocurrencies out there. It’s a sobering reminder of what can happen when bureaucracy gets in the way of progress.
