in a mail In company and its digital asset.
Deaton emphasized the major impact of the SEC’s lawsuit on Ripple, stating, “I don’t think the damage to Ripple’s business caused by the sweeping nature of the SEC’s complaint against Ripple can be adequately estimated.” He underlined the historical context and noted: “We must remember that in 2012, when the founders of Ripple created XRP, stablecoins did not exist and the cross-border payments market was very open and mature for such a disruptive technology. Clearly, it still is today.”
Deaton’s Perspectives on XRP Demand
Reflecting on Ripple’s strategic decisions during its early operations, Deaton recalled the important debate over whether Ripple should prioritize smart contracts or smart payments. He pointed out an interesting anecdote from that period: Vitalik Buterin, the co-founder of Ethereum, resided with then-CTO of Ripple, Stefan Thomas.
Ultimately, Ripple chose to focus on cross-border payments, a move Deaton sees as strategic given the absence of stablecoins and the vast potential of the global cross-border payments market. “Given that stablecoins didn’t exist at the time, and considering how big the global cross-border payments market was and is, I can see why,” Deaton explained.
Supporting Ripple’s strategic approach, Deaton referenced data indicating the exponential growth of cross-border payment flows. In 2022, these transactions will exceed $150 trillion, representing more than 96% of the total cross-border payment volume, with projections reaching $250 trillion by 2027. This growth is driven by the expansion of international trade, increase in global electronic commerce, and greater mobility of people and companies across borders.
Deaton also highlighted key milestones that initially bolstered adoption of the digital asset. “After Coinbase listed XRP in February 2019, Coinbase promoted the usefulness of both XRP and USDC for moving money internationally, in seconds and for virtually free. In June 2019, MoneyGram began using XRP,” he said.
However, the narrative took a dramatic turn when the SEC filed a lawsuit against Ripple in December 2021. “After the SEC filed the lawsuit, Coinbase delisted XRP and MoneyGram stopped using XRP and started using XLM.” instead,” Deaton said.
Criticizing the SEC’s approach, Deaton commented: “Is anyone really going to argue that there was a real difference, ACCORDING TO THE LAW, between MoneyGram using XLM over XRP?” He noted the irony of the SEC’s actions, noting: “XLM founder Jed McCaleb is also the co-founder of Ripple & 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 broad complaint the SEC has ever filed.” Additionally, he accused the SEC of potential conflicts of interest and revealed that the people involved in the lawsuit subsequently aligned themselves with Ripple’s competitors. “Then those same people who pushed for the case against Ripple went on to work with or for Ripple’s competitors,” he said.
Addressing skepticism about his motivations, Deaton clarified his financial interests and independence. “First, as I revealed in FEC filings, 80% of my net worth is in BTC. Second, when Eleanor Terrett and Charles Gasparino wrote their big article on the case in November 2021, they wrote: ‘Deaton is certainly not a fan of Ripple. He criticizes the fact that Ripple itself has sold around 800 million dollars…’”
He concluded: “But when you look at the circumstances surrounding how this case was brought, including the huge conflicts 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 report it.”
At press time, XRP was trading at $2.12.
Featured image from YouTube, chart from TradingView.com
