Arca co-founder and securities lawyer Phil Liu expects Ripple and XRP to drop off the map by the end of this year
In December, the US Securities and Exchange Commission sued Ripple for allegedly selling unregistered securities as a native token of XRP. The lawsuit targets the company’s CEO Brad Garlinghouse and former founder Chris Larsen, claiming that two individual executives have made about $ 600 million from the sale of XRP – unregistered securities. Recently, based on this event, Phil Liu, the co-founder of New York-based cryptocurrency asset management firm Arca, predicts that XRP is going to become a remnant of history by the end of this year.
Phil Liu, the co-founder of New York-based cryptocurrency asset management firm Arca
Arca co-founder and securities lawyer Phil Liu expects Ripple to drop off the map by the end of this year
Liu is a securities attorney. Therefore, he has more objective perspectives in this story. And according to Liu, he finds the allegations presented in the much-talked-about complaint compelling. He explains that XRP is the firm’s only revenue stream while describing its products as inadequate.
Phil Liu stated:
“I think that this thing will be a remnant of history by the end of 2021.”
Back in February 2020, Garlinghouse told the Financial Times that Ripple would not be profitable without XRP sales:
“We would not be profitable or cash flow positive without selling XRP, I think I’ve said that. We have now.”
At the end of December, Liu predicted that Ripple could eventually lose insolvency by the end of 2021 as the company has no alternative solution to XRP sales that are at the heart of the SEC lawsuit:
“I don’t see a viable alternative to replace XRP sales except to move out of the US and exclude US investors from buying XRP. They would have to start from scratch because all XRP profits would be disgorged since they all occurred when Ripple was a US-based company.”
On the other hand, Ripple’s lawyer, Andrew Ceresney, asserted that XRP is inconsistent with the Howey test used to determine if a certain digital asset is a security service:
“To us, this is the SEC trying to stretch Howey beyond its breaking point.”
The besieged company has yet to provide an official response to the SEC lawsuit, but Garlinghouse’s earlier tweets heralded their main arguments.
In another development, XRP rose by 0.62% yesterday, reversing a 0.12% decline from Saturday, XRP ended the week down by 12% to $0.27357. A bearish start to the day saw Ripple’s XRP fall to an early morning low of $0.26850 before making a move.
Steering clear of the first major support level at $0.2638, XRP rose to a mid-morning intraday high of $0.27789. Falling short of the first major resistance level at $0.2818, XRP fell to a late intraday low of $0.268.
XRP/USD 4-hour chart | Source: TradingView
Continuing to avoid the major support levels, XRP recovered to end the day at $0.273 levels. At press time, XRP was up by 0.98% to $0.2785. A mixed start to the day saw XRP fall to an early morning low of $0.27336 before rising to a high of $0.27529.
XRP left the major support and resistance levels untested early on.
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