Was the Ripple vs. SEC Case a Clever Diversion?

A rising discussion in the crypto world has been ignited by analyst Pumpius, who suggests that the ongoing legal battle between Ripple and the SEC might not be what it appears. According to Pumpius, this conflict is not an authentic struggle but a strategic distraction orchestrated by Ripple and its supporters. The portrayal of Ripple as a small player fighting against mighty U.S. regulators serves to mask its true intention: establishing U.S.-endorsed global payment systems under the guise of regulatory contention.

The SEC Lawsuit: A Facade for Government-Endorsed Growth

Pumpius contends that Ripple has never been the underdog as it was often portrayed. The company’s technology was designed with financial institutions and banks in mind, rather than individual traders or hobbyists. Ripple’s offerings, such as minimal transaction fees, immediate settlements, and adherence to the ISO 20022 messaging standard, align with the needs of extensive financial infrastructure. This is not the profile of a startup challenging the status quo but rather of a network poised to supplant SWIFT, the prevalent global payments messaging system.

Ripple’s connections with government-linked entities, according to Pumpius, reinforce this theory. Their partnerships include collaborations with the Federal Reserve’s pilot projects, central banks in regions like Bhutan, Palau, and Montenegro, and payment channels in the Middle East and Asia. Additionally, Ripple has associations with U.S. defense-connected banks such as BNY Mellon. For Pumpius, these ties highlight a sanctioned expansion rather than innovative defiance.

The lawsuit with the SEC, he argues, was the ideal ruse. While media narratives suggested Ripple was in jeopardy, the company quietly secured over 1,700 agreements and NDAs with major financial entities, many of which were international. This created the illusion that Ripple was escaping U.S. scrutiny. In reality, Pumpius claims this was a strategic plan to establish payment corridors abroad first and later integrate the infrastructure back into the U.S. when it was fully developed.

XRPL: Washington’s Blockchain and Its Broader Ambitions

Pumpius believes that Ripple’s ultimate vision extends beyond mere payment systems. He suggests that the U.S. aims to leverage the XRPL as the foundation for a blockchain-based reserve network, transferring control from conventional banking networks to a government-connected ledger. A pivotal element of this strategy is RLUSD, Ripple’s proposed stablecoin. This stablecoin is fully compliant with U.S. regulations, tailored for institutional custody, and directly linked to the XRPL. Once operational, RLUSD could serve as the U.S. domestic bridge asset, while XRP facilitates international settlements.

The XRPL’s capabilities could extend to handling any asset, including sensitive identity data like DNA, warns Pumpius. Tokenizing such bio-data would grant the ledger’s controllers influence over not only finances but personal identities as well. The intention is to portray the project as opposing the system, allowing it to develop without interference, and then reveal its true alignment once the infrastructure is too deeply rooted to challenge. By the time the public grasps the network’s scope, Pumpius argues, the groundwork is already set.

In his assessment, Ripple has established global financial routes while feigning a regulatory struggle, ensuring that the technology would operate smoothly domestically. From payments to tangible assets and potentially identity data, the XRPL could evolve into the state’s blockchain instrument. For Pumpius, the lawsuit was a facade; the real mission was expansion.