The Genesis of Ripple and XRP
In 2012, Ripple’s founders embarked on a journey to revolutionize the global payments landscape with the creation of XRP. At a time when stablecoins were yet to emerge, Ripple had to decide between two promising paths: smart contracts or cross-border payments. Ultimately, the decision to focus on cross-border payments was driven by the vast potential of the market and the absence of stablecoin alternatives.
Ripple’s Initial Success and the SEC Lawsuit
Ripple quickly gained traction, and by 2019, major platforms like Coinbase had listed XRP, highlighting its efficiency in facilitating rapid international money transfers. MoneyGram also integrated XRP into its transfer processes, marking a significant milestone. However, this momentum faced a severe setback when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in December 2020, alleging that XRP was an unregistered security.
The Ripple Effect of the SEC Lawsuit
The lawsuit’s ramifications were immediate and profound. Coinbase delisted XRP, and MoneyGram pivoted to using XLM, a cryptocurrency created by Jed McCaleb, who is also a Ripple co-founder. This situation raised questions about the legal distinctions between XRP and XLM in payment applications. Attorney and XRP advocate John Deaton has vocally criticized the lawsuit’s extensive scope, suggesting that personal interests and affiliations may have influenced the case, with some individuals involved later joining Ripple’s competitors.
Latest Developments in the Ripple vs SEC Case
The legal battle between Ripple and the SEC has seen significant developments. On July 13, 2023, Judge Analisa Torres ruled that XRP is not a security, a decision that temporarily buoyed the spirits of XRP supporters. However, the SEC filed an appeal on October 17, 2023, challenging aspects of this ruling. As the saga continues, the SEC must submit its opening brief by January 15, 2025, ensuring that the case remains a focal point of public and regulatory scrutiny.
