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Deaton emphasized the sweeping impact of the SEC’s lawsuit on Ripple, stating, “I don’t think you can properly quantify the damage to Ripple’s business caused by the sweeping nature of the SEC’s complaint against Ripple.” He emphasized the historical context, noting: “It’s important to remember that in 2012, when Ripple’s founders created XRP, stablecoins did not exist and the cross-border payments market was wide open and ready for such a disruptive technology. Of course, this is still the case today.”

Deaton’s observations on the XRP lawsuit

Reflecting on Ripple’s early-stage strategic decisions, Deaton recalled a significant debate over whether Ripple should prioritize astute contracts or payments. He cited an compelling anecdote from that period: Vitalik Buterin, co-founder of Ethereum, lived with the then CTO of Ripple, Stefan Thomas.

Ultimately, Ripple decided to focus on cross-border payments, which Deaton considers strategic given the lack of stablecoins and the huge potential of the global cross-border payments market. “Given that stablecoins didn’t exist at the time, and given how large the global cross-border payments market was and is, I understand why,” Deaton explained.

Supporting Ripple’s strategic approach, Deaton cited data showing exponential growth in cross-border payment flows. In 2022, these transactions exceeded $150 trillion, representing over 96% of total cross-border payment volume, and are projected to reach $250 trillion by 2027. This growth is due to the expansion of international trade, the growth of global e-commerce, and the increased mobility of people and enterprises across borders.

Deaton also highlighted key milestones that initially drove adoption of this digital asset. “After Coinbase listed XRP in February 2019, Coinbase promoted both XRP and USDC to transfer money internationally in seconds and for virtually free. In June 2019, MoneyGram started using XRP,” he stated.

However, the narrative took a dramatic turn when the SEC filed a lawsuit against Ripple in December 2021. “After the SEC filed its lawsuit, Coinbase delisted XRP, and MoneyGram stopped using XRP and started using XLM instead,” Deaton recalled.

Criticizing the SEC’s approach, Deaton noted: “Will anyone really argue that LEGALLY there is a real difference between MoneyGram using XLM and XRP?” He pointed out the irony of the SEC’s actions, noting: “XLM founder Jed McCaleb is also the co-founder of Ripple and XRP!”

Deaton characterized the SEC’s complaint as overly broad, stating: “The SEC’s complaint against Ripple and XRP is without a doubt the most grossly overbroad complaint the SEC has ever filed.” He then accused the SEC of a potential conflict of interest, revealing that those involved in the lawsuit later aligned themselves with Ripple’s competitors. “Then the same people who pushed for the case against Ripple began working with or for Ripple’s competitors,” he said.

Addressing skepticism about his motivations, Deaton explained his financial interests and independence. “First of all, as I disclosed in FEC filings, 80% of my net worth is in BTC. Secondly, when Eleanor Terrett and Charles Gasparino wrote an extensive article on this topic in November 2021, they wrote: “Deaton is certainly not a Ripple fanboy. He is critical of the fact that Ripple alone has sold approximately $800 million…

He concluded: “But when you look at the circumstances surrounding the filing of this case, including the massive conflict of interest and the fact that the people behind the lawsuit helped or worked for Ripple’s competitors, you don’t have to be a fan to call it out.”

At the time of publication, the price of XRP was $2.12.

Featured image from YouTube, chart from TradingView.com