Some surprising insights might be uncovered by delving further into Ripple, Coinbase, Ethereum, and XRP.
Bill Morgan, a lawyer licensed in both the United Kingdom and Australia, tweeted his opinions on these topics on May 10, 2023, providing a fascinating new angle on the relationships between the two jurisdictions’ legal systems.
Morgan compared the income sources and dependencies of Coinbase and Ripple in a series of tweets. He referenced an important part of an interview between attorney John Deaton of the Deaton Law Firm and inventor of the website CryptoLaw and Paul Grewal, the Chief Legal Officer of Coinbase.
Grewal has said that around 20% of Coinbase’s earnings come from overseas operations. Morgan determined this information from Coinbase’s quarterly report, which showed that Bitcoin and Ethereum account for 54% of transaction income.
According to Morgan’s analysis, this means that the U.S. market for Ethereum is crucial to Coinbase’s operations. He also considered the problems that may occur if Coinbase was compelled to temporarily halt trading of Ethereum and Bitcoin on its US platform.
Morgan shifted the conversation back to Ripple and said that 90% of the company’s activity occurs outside the United States. In spite of this, he stressed that the vast bulk of Ripple’s revenue originates from only one place: the selling of XRP to On-Demand Liquidity (ODL) clients.
Morgan hypothesized that Ripple’s recent move with Liquidity Hub, which does not utilize XRP at the moment, was a deliberate choice to expand Ripple’s US business and reduce its dependency on XRP sales. He defended the decision by saying it broadens Ripple’s potential profit pools.
He thought it would be disastrous for Coinbase, but that temporarily halting XRP trade was a reasonable compromise.
Ripple’s Chief Legal Officer, Stuart Alderoty, provided an explanation for why the company’s new Ripple Liquidity Hub (released on April 13) does not accept XRP in a blog post on April 17, 2023.
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