As Ripple’s legal fight with the U.S. Securities and Exchange (SEC) continues to twist and turn, the price of XRP has fallen to levels last seen before the historic judgment by Analisa Torres in July 2023.
In 2020, John Deaton, creator of CryptoLaw and an attorney for XRP investors, speculated that if the SEC had not initiated the action against Ripple and two of its senior executives, XRP would be in a much better situation. He said that the lawsuit had a negative impact on XRP and XRP Ledger development.
The SEC filed a lawsuit against Ripple, its CEO Brad Garlinghouse, and its co-founder Chris Larsen in December 2020, stating that they had not properly registered its XRP coin as a security before to selling almost $1.3 billion in the cryptocurrency.
However, in July, Ripple won a major victory for the cryptocurrency industry when the U.S. District Court for the Southern District of New York ruled that the sale of XRP tokens on exchanges and via algorithms did not constitute investment contracts. While the verdict was good news for XRP investors, the cryptocurrency had already taken significant hits from the legal action.
Ripple and XRP attorney John E. Deaton noted the negative effects of the SEC dispute in his most recent X post. According to Deaton, XRP lost an astounding three years of momentum due to litigation. Three years is an eternity in the volatile world of cryptocurrencies, which witnessed major developments, inventions, and a parabolic bull surge during that time.
The lawyer emphasized how Coinbase supported XRP heavily before the lawsuit caused the exchange to delist the coin. Deaton said that, once Coinbase began trading XRP, he increased his holdings because of the currency’s increased value.
Deaton recalls that before offering XRP, Coinbase checked with the SEC to make sure it was lawful. In a meeting with the SEC in January 2019, Coinbase said that it evaluated XRP using the same strict standards for digital assets that had been commended by an SEC officer in public.
MoneyGram’s legal team “concluded, like Coinbase’s, and like the SEC enforcement lawyers in June 2018, that XRP was NOT a security,” according to Deaton. Despite the efforts of the Ripple partners, the San Francisco-based fintech company was sued by the Securities and Exchange Commission.
Coinbase and Circle, which operates the stablecoin USDC, made the announcement to extend the networks supporting the stablecoin yesterday. Coinbase has purchased a minority share in Circle and has committed to helping to “unlock additional utilities and grow the USDC ecosystem.”
Deaton, in reaction to the news, mused that had the SEC litigation never occurred, Coinbase would have bought an equity investment in Ripple. Ripple and XRP were en route to significant acceptance in the cross-border payment market.
After the landmark ruling, Coinbase restored XRP access for U.S. customers, while MoneyGram ended its partnership with Ripple. Instead, in October 2021, the American remittance provider partnered with the Stellar Development Foundation (SDF), a rival to Ripple, to enable transactions using the USD Coin (USDC) stablecoin. Stellar Foundation cash reserves allowed them to become a MoneyGram minority investor this month.
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