Ripple’s acquisition of Circle could concentrate stablecoin issuance power, drawing intense regulatory scrutiny over antitrust concerns.
Legal experts warn Ripple’s past conduct, including campaigns against competitors, may influence regulatory outcomes in the deal review.
Coinbase is also pursuing Circle, but Ripple’s significant XRP reserves keep it in a strong financial position to compete.
Ripple’s interest in acquiring Circle, the company behind the USDC stablecoin, has triggered strong reactions from legal experts and industry observers. Gabriel Shapiro, the person behind MetaLeX Labs, believes the result could heavily regard unfair control and practices in the market that could lead to a “crypto apocalypse.”
Many U.S. regulatory agencies, such as the Department of Justice and the Federal Trade Commission, will likely pay close attention to the potential deal. they may review if Ripple would dominate the digital asset sector as a result of the merger. Thanks partly to its XRP token and related blockchain offerings, Ripple is already a major presence in the market.
People worry about the unfairness of competition and past actions.
Shapiro pointed out that Ripple has gone after other digital currencies before through its promotional activities. Last year, Ripple co-founder Chris Larsen joined forces with Greenpeace to aim for Bitcoin’s mining system, leading some to think he was trying to keep up with the competition. The history may factor strongly in any decision made about the Circle buyout.
Shapiro also referenced the Revlon doctrine, which obligates company boards to prioritize the best financial outcome for shareholders during a sale. He emphasized that Circle must account for antitrust risks before proceeding with any deal, especially one involving a major industry player with a controversial past.
Competing Bid from Coinbase Adds Complexity
Ripple is reportedly competing with Coinbase to acquire Circle. While Ripple’s $5 billion bid was rejected earlier, the company’s substantial XRP holdings provide it with a strong acquisitive position. Fortune reported that Coinbase might have an advantage in the race, potentially offering a more favorable regulatory outlook.
If Ripple succeeds, the acquisition could reshape the stablecoin market. Industry watchers believe Ripple could become the largest asset issuer across multiple blockchains. This dominance may limit competition, particularly if Ripple leverages Circle’s infrastructure alongside its own network.
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