Ripple’s Chief Technology Officer (CTO) David Schwartz has recently added some clarity around the ongoing litigation against the fintech firm, laying out two hypothetical scenarios in response to allegations from the U.S. Securities and Exchange Commission (SEC) that Ripple paid between $1 million and $5 million for $XRP to be listed on exchanges.
Schwartz’s first hypothetical scenario revolves around a fictitious exchange demanding a $1 million payment to list XRP. In this scenario, the exchange initially refuses Ripple’s reasoning that listing the cryptocurrency would be in their business interest. Months later, Ripple identified a payout provider associated with the exchange that could facilitate international payments into their local currency.
The exchange agrees to become an On-Demand Liquidity (ODL) endpoint, which necessitates listing XRP. Ripple covers the $1 million integration cost for the additional ODL and last mile payment services, and XRP is listed.
Schwartz says that this could be “alleged to be us paying an exchange $1 million to list XRP”, but he emphasizes that the facts are more nuanced. The Ripple CTO suggested that it isn’t fair to frame these allegations as if they were facts, noting that a “litigation adversary will put the worst spin that is not inconsistent with the facts in their allegations.”
In the second hypothetical, Schwartz describes an exchange refusing to list XRP despite it being in their business interest. Months of stalemate follow, with the exchange suggesting they would list XRP if Ripple didn’t exist.
Eventually, Ripple arranges a deal, paying the exchange to list XRP, which then becomes 20% of the exchange’s revenue. Schwartz posits the question that the firm paid money to not let its existence hurt the XRP ecosystem.”
He added: “Then a litigation adversary selectively uses some of these facts to imply we were using money to unfairly boost XRP adoption or liquidity. If that actually happened to you, would you be pissed off?”
The hypothetical scenarios serve to highlight the complexities of the allegations and the challenges of interpreting business actions in the rapidly evolving world of cryptocurrency. The SEC’s case against Ripple has been closely watched by both the cryptocurrency and the wider financial communities.
As CryptoGlobe reported, Ripple CEO Brad Garlinghouse recently took a strong stance against the SEC, accusing the regulator of spreading confusion and stifling innovation in the crypto space.
Featured image via Pixabay.
