Perhaps having a crypto skilled on the helm of the SEC is not nice if the Crypto Firm is sued by the SEC
Gary Gensler knows a lot about cryptocurrencies. Despite his reputation as a regulator, his appointment as head of the Securities and Exchange Commission for contested crypto supplier Ripple might seem even better than naming one of his own to act as a currency checker that the agency will soon lead Gensler is currently trying to put Ripple out of business bring to. On the other hand, it could be the worst that could have happened to Ripple because the closer you look at the XRP, the less it apparently looks like a cryptocurrency, whatever that means.
Unlike Bitcoin, which operates over an open network that is not controlled by any party, XRP is an asset whose value and viability depends almost entirely on Ripple’s efforts, the SEC claims in its complaint. That makes it a security, and it should have been registered as such by Ripple years ago, according to the SEC.
The complaint shows a pattern in which Ripple manages XRP like a security and sells it based on proprietary information, said Stephen Palley, an associate at Anderson Kill law firm, who has a background in securities laws and cryptocurrencies.
The complaint, he said, seems “to come close to the limit of securities fraud …”.
Phil Liu, chief legal officer at Arca, a crypto-focused asset management firm that doesn’t hold XRP, said the SEC’s case was compelling.
Ripple doesn’t appear to have stable sources of revenue outside of selling XRP, he said, adding that the products the company has developed are “completely inadequate to support operations.”
“I think this thing will be a holdover from history by the end of 2021,” he said, referring to XRP.
Cryptocurrency startup Ripple’s future hinges in the SEC case [WSJ]
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