Gary Gensler knows a few things about cryptocurrencies. As such, in spite of his reputation for regulatory ferocity, his appointment to lead the Securities and Exchange Commission might look like even better news for embattled crypto-purveyor Ripple than the naming of one of its own to serve as Comptroller of the Currency, given that the agency Gensler is soon to lead is currently trying to put Ripple out of business. On the other hand, it might be the worst thing that could have happened to Ripple, as apparently the closer you look at its XRP, the less and less it looks like a cryptocurrency, whatever that might mean.

Unlike bitcoin, which operates across an open network that isn’t controlled by any one party, XRP is an asset whose value and viability depends almost wholly on the efforts of Ripple, the SEC alleges 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 of Ripple managing XRP like a security, selling it based on proprietary information, said Stephen Palley, a partner at the law firm Anderson Kill, who has a background in securities laws and cryptocurrencies.

The complaint, he said, appears to “walk up close to the line of securities fraud….”

Phil Liu, the chief legal officer at Arca, a crypto-focused asset-management firm that doesn’t hold XRP, said that the SEC’s case is compelling.

Ripple appears to have no stable revenue streams outside of selling XRP, he said, adding that the products the company has developed “are wholly inadequate to support the operation.”

“I think that this thing will be a remnant of history by the end of 2021,” he said, referring to XRP.

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