Concerns Over Ripple’s Potential Acquisition of Circle
Gabriel Shapiro, the founder of MetaLeX Labs, has expressed serious concerns regarding Ripple’s potential acquisition of Circle, warning that such a move could lead to dire consequences for the cryptocurrency sector, which he describes as a possible “crypto apocalypse.”
Regulatory Scrutiny
Shapiro suspects that if Ripple proceeds with the deal, it is unlikely to survive scrutiny from regulators due to antitrust issues. These assessments would evaluate whether this acquisition could provide Ripple with excessive dominance within the crypto ecosystem.
Dangers of Market Dominance
He highlighted the dangers of Ripple becoming the predominant asset issuer across all blockchains, labeling this scenario as both catastrophic and anti-competitive. He pointed to past behaviors where Ripple seemingly wielded its power to undermine competitors, using tactics aimed at spreading fear and uncertainty in the market.
For example, in 2022, Ripple’s co-founder Chris Larsen collaborated with Greenpeace to initiate a campaign targeting Bitcoin mining practices.
Recommendations on Antitrust Risks
The legal expert further recommended that Circle might want to consider adhering to the Revlon doctrine, which emphasizes that companies must prioritize securing the best outcomes for their shareholders. This approach entails a thorough assessment of any antitrust risks that may arise during acquisition discussions.
Shapiro cautions that should a definitive agreement be reached, it would certainly attract the attention of the Department of Justice (DoJ) and the Federal Trade Commission (FTC), especially considering Ripple’s previous contentious actions against Bitcoin and Ethereum.
Ripple’s Competitive Position
Currently, Ripple is vying with major cryptocurrency exchange Coinbase for the opportunity to acquire Circle. According to recent reports, Ripple’s initial $5 billion offer was turned down as insufficient. However, despite Coinbase appearing to be favored in this competitive landscape, Ripple’s significant holdings of XRP tokens position it advantageously for future negotiations.
