XRP “will be a remnant of history by the end of 2021,” it has been claimed.
Phil Liu, the chief legal officer at the crypto-focused asset management company Arca, was speaking to The Wall Street Journal as part of an in-depth article examining the U.S. Securities and Exchange Commission’s case against Ripple.
The SEC filed a lawsuit in December against the company, and claims that the distribution of XRP tokens has amounted to an unregistered securities sale.
Liu warned that Ripple doesn’t appear to have any significant revenue streams that extend beyond selling its vast holdings of XRP — not least because the products that it has been developing haven’t been fit for purpose.
Setting out its case, the SEC has claimed that while Ripple has generated $700 million in revenue by selling XRP publicly over the past eight years, it has just netted $23 million in sales of its software between 2012 and 2019 — with little adoption among banks.
The WSJ went on to note the precedent that has been set by two previous high-profile cases pursued by the SEC. Kik Interactive lost after a bitter legal fight, while Telegram eventually decided to settle and return hundreds of millions of dollars to investors.
Andrew Ceresney, a partner at the law firm that’s representing Ripple in the current case, has claimed that the SEC is trying to stretch the Howey Test — which determines whether an asset is a security or not — “beyond breaking point.”
For now at least, it seems that Ripple is now pinning its hopes that the appointment of crypto-friendly commissioner Gary Gensler will see the SEC change its tune.
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