Why Ripples SEC Lawsuit Might Be a Strategic Masterstroke

The legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC) has sparked widespread discussion, with many viewing it as a crucial event for the crypto sector. Some believe the lawsuit aimed to block Ripples efforts to challenge established financial systems or compete with Ethereum, while others see it as a calculated move by Ripple to achieve broader objectives.

A Different Perspective

Vincent Van Code, a blockchain analyst, suggests that Ripple‘s legal battle with the SEC may have been part of a carefully planned global strategy. According to him, the lawsuit might have been initiated to accomplish specific objectives, such as slowing Ripple’s rapid expansion and allowing for a detailed examination of its operations. He argues that this approach helped Ripple strengthen its credibility and position within a regulated environment.

Slowing Down Ripples Growth for Vetting

Some suggest the lawsuit provided an opportunity to evaluate Ripples operations before its further expansion. As Ripple gained recognition as a global technology company, the legal proceedings allowed stakeholders to assess its potential within a regulated framework. This scrutiny helped Ripple address regulatory concerns, building greater trust among investors and partners.

Similarly, another theory suggests that the lawsuit was a way to force Ripple‘s executives, Brad Garlinghouse and Chris Larsen, to disclose more information about themselves and their company. Court filings often require transparency, so this would have allowed the public and regulators to learn more about Ripple’s inner workings.

By forcing the company into a public legal battle, Ripple‘s leadership was compelled to share critical information, which might have been more difficult to obtain otherwise. As David ’JoelKatz‘ Schwartz points out, it’s important to remain cautious about trading based on material non-public information, as it could be both immoral and illegal.

I consider trading on the basis of material non-public information to be immoral and it is often illegal.

Ripples Legal Battle: Building Credibility and Market Strength

Furthermore, the lawsuit could have been designed to create the impression that Ripple was not given special treatment or supported by the U.S. government. Given the prevalence of accusations of favoritism and secret deals, the legal action served as a way to demonstrate that Ripple was simply another player in the regulatory process. This helped deflect suspicions that Ripple was being manipulated behind the scenes, allowing it to maintain its credibility and public image as an impartial entity.

Finally, the lawsuit could have allowed Ripple to build thousands of partnerships, many of which remain under NDA. These partnerships helped Ripple accumulate XRP from retail investors over time.

By drawing attention to the lawsuit, Ripple likely generated significant media coverage, increasing interest in its technology. XRPs value and utility grew, attracting institutional interest and allowing Ripple to strengthen its market position.