The Downfall of Ripple (XRP) – SEC Lawsuit

with the SEC dropping a bom by announcing that It would charge Ripple Labs for an unregistered security sale. you're probably looking to understand what's
going on, what's the future for ripple. but also how can this affect your other coins Today, I'm not just going to read the news
to you, What I want to do this video,is to take this
opportunity to share some knowledge about this case. Why does the SEC all of sudden is going after
Ripple? With other coins in our portfolios, I want
you to have the knowledge to be able idenfity if you're coin COULD actually be classified
as a security. We are going to use the Ripple Case as an
example and break down the video in 4 parts : Part I. What is an unregistered security
Part II. Is Ripple actually a security ?
Part III. What is the Worst case scenario for Ripple
? Can it go to 0 ? Part III. Are other coins( like cardano, chainlink,
ethereum) at risks ? Hello everyone, My name is jerome, If you
want invest better, smarter in the cryptocurrency space, then this channel is made for you.

I bring you monthly updates, and the goal
is to strengthen and improve our investing skills together (i'm are talking about crypto
knowledge, strategies, but also investing mindset. So please consider subscribing if you want
to be part of this community, it helps me a lot! Part I. What is an unregistered security sale ?
• In order to understand this, the first fundamental question we should ask ourselves
first is WHAT IS A SECURITY ? : ○ What the Supreme Court is using to define
wether something is a security or not, is what they call the "Howey Test" as per the
(Howey SEC case from 1946). ○ So what does it say, the test is saying
if 4 of the following conditions are met then its a security :
§ Condition #1 = The transaction is an investment of Money : so there must have been an exchange
of money involved in the operation § Condition #2 = There is an expectation
of profits from the investment : people must expect the instrument to rise in price to
generate profits § Condition #3 = The investment of money
is in a common enterprise: meaning that you need a legal entity bound to the security
§ Condition #4 = Any profit comes from the effort of a promoter or third party : meaning
that if investors have no control over the profits that will be generated from the investments,
then it could be a security.

○ So those are the 4 conditions to define
a security Let's jump into part II : is Ripple a security
? Let's take all of the 4 conditions and see
if Ripple does check the boxes : Condition #1 = Transaction is an investment
of Money >> This one is a no brainer, For sure money was involved (People paid money
in exchange of XRP and I think all court analyzing the case would agree on this) Condition #2 = There is an expectation of
profits : the company says that there was no expectation of profits because Ripple never
officially promised any sort of profit or return to investors.

However, I think Anyone who has been following
crypto over the past few years knows that people buy XRP with the hopes that its price
will go up. XRP was one of the most successful tokens
at one point. To argue that there is no expectation of profit
is probably stretched Condition #3 = The investment of money is
in common enterprise = here, XRP holders have invested in a common enterprise. All funds are pooled by XRP to build out the
system, and users all benefit or losing from the corresponding fluctuations in the token’s
price. So that might be true as well/ Condition #4 = Any profit comes from the effort
of a promoter or third party. Right here, I think that the growth of XRP's
architecture is clearly not yet fully autonomous, and still relies heavily on its team. So it's a maybe for me.

In my opnion overall, there is, a likelyhood
that the SEC is able to prove all of those points. Maybe the fact that the management paid themselves
600M dollars for the past few years is catching the SEC's attention. I want you to note by the way, that they paid
themselves in USDollar, and not in XRP…. It think they have bad and old wallstreeters
habits… So Part number III, now What's going to happen
next ? Here is what I think the series of event can be for Ripple. I'm not laying it out to Say ripple is bad,
but just to let you know what could be the WORST case scenario for XRP, so that you can
gauge wether on not its : So step #1 : SEC proves that XRP is a security
> Investors lose confidence and XRP dumps Step #2 : If the SEC proves that XRP is a
security, it opens up the door to the SEC to proving that it was an unregistered security
sale > What will investor do? dump more XRP
Step #3 : Investors will start a class action lawsuit against Ripple saying that lied to
them, and blame them for loosing of their money > What happens next ? More dump
Step #4 : Ripple is forced to sell more tokens in the market to pay for the lawsuits, and
even if Ripple has hundreds of billions of tokens, if the trade price is close to 0,
it would mean the end of Ripple and XRP.

I find it also very odd that the token rose
so much in November… I there there could have been some price manipulation
to let Ripple sells tokens in the market at a higher price… I find this timing to be quite odd to be honest… I mean 3 or 4 weeks before the SEC lawsuit,
we have Ripple jumping 400%…. I think they knew ahead of time, and manufactured
this move higher to sell to retail investors… you can look at this transaction from early
december No matter what you say and how much you LOVE
the project, the facts are there… Overall its very sketchy what Brad and Chris
have doing at Ripple, there is no transparency and I don't really want to invest in a company
like this, If the SEC is able to prove that XRP is actually
a security instead of a token, then, the likelyhood that it confirms the unregistered security
sale is actually quite high..

Please consider subscribing if you enjoy the
content so far, it helps me a lot guys, thank you so much. So you might ask yourself if your coin is
at risk. Let's jump into part 4: are other coins at
risk? The short answer is yes, the reality and we
have to face it, is that all tokens out there are at risks. We are dealing with a very new space, and
telling you that this coin or that coin is safe would not be true.

I want you to remember that there is a risk
in any investment, and for us crypto investors, one the biggest one is regulatory risk. We have to be aware and not ignore the reality. I would however say that there is probably
more risks in something like Ethereum because of the size and magnitude of its ecosystem. It has one the largest exposure to retail
market along with bitcoin.

So if you want to compare cardano, or any
other smaller coin to ethereum in terms of regulatory risk, I think the SEC would likely
go after this one, just because of its size. But it's very hard to anticipate those kind
of things. What I would remind you to do is to DO your
due diligence about the projects that you invest. There will be regulatory issues coming up
in the future, so be mentally prepared for that. Do not discard any options and remember that
investing is a game of prepration. So get prepared, think about the risk ahead
of time. So that if, for example there is a charge
against Cardano and you think there is a very low likelyhood to go throug, they it will
be so much easier to pull the trigger and buy more, just because you prepared yourself
ahead of time. Let me know in the comments what you think
is going to happen for Ripple, and smash that like button at the same time.

Alright guys, the french quote of the day
is : La transparence n'est rien sans clarté. Transparency is nothing with clarity. So be transparent, be open, continue to believe
in your convictions, and things should go well Alright that was jerome once again,
And until next time, BBYE.

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