Legal Initial Made Easy

Legal initial

hello all and welcome to the great xrp summation on legal briefs crypto edition in the next 10 minutes i will impart all my xrp knowledge upon you and then having nothing more in my brain to give i will fall into a coma for a hundred years let us begin today i am hopefully going to clear up some confusion surrounding xrp and in general what a security is i'm going to explain why the exchanges have halted sales and finally at the end always the end i will summarize the legal position of ripple xrp for you what the most likely outcomes are and then tell you why buying xrp now at these prices to me is an excellent speculative investment with prices and time frames everything first i apparently have to say that none of what i say here is legal advice do not rely on my opinions here at all if you need legal advice hire this guy bonus points if you can name the actor and movie in the comments also do not take whatever i say is financial advice for the love of god lawyers go to school specifically because they're no good with numbers that'd be a bad idea so okay getting that out of the way let's start by discussing a problem with the way i see people thinking of a security in a legal context i read all the comments on my blogs and all the comments even on some other people's blogs i'm kind of a comment stalker but i do all the comments talking in order to understand where people are not quite understanding some of the legal issues involving xrp so that i can address some of those in my vlog i mean i even see some people worried that they're going to get in trouble if they sell their xrp coins because it might be determined to be a security i also see some people over emphasizing the need for a determination that xrp is not a security so the truth is that there can never be a blanket determination that xrp is or isn't a security because the determination of what is a security is made in a snapshot in time you know primarily at the time of the sale the sec enforces sales of securities and so the determination is made at the time of the sale that the sec is enforcing i actually think that the former head of the sec clayton had a good analogy at a speech he made in 2018 where he made an analogy to a laundromat so he said in the speech that if someone has a laundromat and they sell you a token that you can use to wash your clothes at the laundromat that is not a security but if someone sells you and 10 other people tokens that you can use at a laundromat that is still being built and then uses the proceeds of the sale to build the laundromat and then the purchasers are expected to be able to sell the tokens to other guys that could use the money at the laundromat once it's completed now that is a security but once the laundromat is built any sales of tokas at that time are not sales of securities those are just a kind of currency so as clayton says at the bottom of of this story quote just because it's a security today doesn't mean it'll be a security tomorrow and i think that's exactly what we're seeing with the sales of xrp as the use cases for x xrp evolve and increase and become more decentralized the less likely that xrp is a security but it's not static it's changing all the time and i would take it even one step further and say that it also depends on who is selling to who now can you sell an xrp coin to me right now or would you get sued by the sec of course you can sell it to me because there has to be an investment contract between us for the sale to be of a security because by definition a security consists of a buyer me relying on the seller you and your work to grow the investment of the coin and obviously the coin that i just bought from you i'm not relying on any work that you're going to do when you transfer the coin to me so that would not be a security so remember to say that xrp can be deemed a security is not accurate xrp can be deemed as security only for certain transactions at certain times which leads me to my next topic and if you are smart which i believe you are you probably have already thought of this so if you have to rely on other people's work in order to have a sale deemed a security now why did the exchanges stop trading of x or halt trading of xrp i mean they certainly can't get in trouble because they are definitely not selling securities either right they have no investment contract and actually they haven't they usually aren't even selling their own xrp they're just putting buyers in touch with sellers and you are absolutely correct coinbase is not selling securities at all but let's answer the question by asking what does the sec stand for the security and exchange commission emphasis on exchange taking a quick look at title 1 section 2 you can see that in 1934 congress gave the sec the power to regulate all securities exchanges including those like the new york stock exchange and like any exchange that allows trading of securities so even if there's no investment contract between myself and coinbase if coinbase sells me xrp from even from ripple directly it could potentially get in trouble by failing to register as a securities exchange and that is why the exchanges all got nervous when the lawsuit was filed and halted trading they have to register if they are involved with any securities and to be on the conservative and safe side they just decide they're going to halt trading and as a brief aside while everyone is focused on the ripple lawsuit let me throw out a little hypothetical question to you if you wanted to control an industry that involves over a thousand different companies many of which are decentralized and difficult to control by nature which is the more efficient way to control it suing each individual company one by one or by controlling the handful of large markets where those companies goods are traded the exchanges i'll leave that right there i'm not going to go any more down that rabbit hole but just food for thought okay so i'm running out of energy here so let me get to the heart of the matter what you've come for the great summation as you know i've only really gotten into xrp and the ripple lawsuit since back in december i bought in last weekend and i want to sum up the last month for me because i spent a lot of time figuring things out first i started by reviewing the sec versus ripple lawsuit and i read it twice okay if you remember there was no request for a declaration from the court that xrp was a quote security which the sec could have requested from the court but didn't that clued me in to something to the effect that this lawsuit was going to be limited to monetary damages and the only effect on xrp would be on the xrp in escrow now that was the first realization i came to also i didn't reach any conclusion as who would win the lawsuit for two reasons number one no one really knows because there's no admissible evidence out there yet and number two with these type of lawsuits there's often no clear winner for example if the initial offerings from 2013-14 are held to be illegal sales but not the sales they're after is that a win for the sec you might say it is but if it doesn't halt what ripple is doing currently and bring some clarity and confidence to the market now isn't that really a win for ripple and xrp also so win and lose lose and win are all kind of phantom concepts in litigation and that's not just litigation it's litigation in general it's just not black and white so i concluded that this litigation is likely to end in settlement and then i began looking at the possible settlement scenarios because i wanted to see what the worst case scenarios looked like i first looked at the paragon coin settlement and that was a monetary settlement and a reiteration to seize and assist violations of securities laws this clued me in that even a bad settlement would only affect the xrp held by ripple and escrow and that was probably the sticking point in settlement negotiations next i looked at the kick interactive judgment was which was really a worst case scenario i mean this was this was a case that was litigated to a conclusion with kik completely losing everything now the judgment against kik was very interesting because it showed that even in a worst case scenario there would still be a mechanism possibly for sale of xrp that was held in escrow that might allow ripple to continue expanding the use of xrp while limiting dumping of xrp by ripple on the market now the kick case was also instructive because after the case was lost i mean 100 lost kick the company was able to continue and the kin token was able to continue as well so at that point i knew that the likely worst case scenario from a litigation standpoint is that now it's a significant disruption in ripple's business model no doubt the best case scenario is a complete victory summary judgment in court and none of the sales are deemed to be sales of securities none of them i think you all know what that would do for xrp that's an easy one moon lambo would become moon bugay and that would be your house so at this point i have to take off my lawyer hat and do some speculative investor discussion because that was my next line of thought now right after the sec lawsuit was announced back in december of last year xrp fell from bouncing around the 50 to 70 cents range to the 20 to 30 cents range and the only reason for this was the lawsuit which is the reason also i became interested because you could say the lawsuit was artificially holding the price down in a sense and that's something i could bring some special knowledge to to analyze now my conclusion was that the most likely outcome of the sec lawsuit would be a settlement involving possibly a large fine or penalty for sales from 2013 14 maybe 2015 and some sort of control or limitation on the sale of the excred xrp and that's a conservative conclusion on my part now that conclusion would hurt ripple no doubt but would by no means be a death blow i am also a believer in the market and i knew and everyone knew going into 2020 that ripple was having issues with the sec and i believe that some of that was already priced into the valuation of xrp going into 2020 also the uncertainty of the rules in general was already priced into the numbers and it was the excitement of the flare network and those announcements which in large part led to the bump up into the 57 50 to 70 cents range on the coin price which you can see on the chart now nothing has changed there since flare is moving forward as i expected here's here's the headline from january 9 of this year so here comes the price and time conjecture that you've been waiting for now with the thesis that we are currently at an artificially low price i then do an investment analysis risk versus reward xrp right now it's in a slingshot and a favorable outcome of the litigation is going to sling it up into a much higher territory there's been a lot of uncertainty around xrp for years now with sec involvement also a lot of fear of litigation and a good resolution of the litigation which i expect takes the price up past the 70 cent high it hit last year i believe that a decent resolution of the litigation takes it back into the 50 to 70 cents range and i say slingshot because this is going to happen very quickly when it does a couple days now with that said i'm not here to hype xrp i do think i have a conservative call when i say that the prices will go up two to three times at the end of the litigation quickly from here and the truth is that no one knows now on the downside xrp if things don't go well dwindles to zero you lose everything you know this is an all or nothing deal now how does the price go to zero the litigation ends poorly and the sec is able to strangle ripple's ability to fund operations ripple is forced to shut down with no other entity taking its place now do i think this scenario is likely i don't think so because we're not talking about amazon here you know ripple is not a company that's business involves warehouse and vans and distribution centers ripple is a technology company and if necessary ripple will become ripple malta or ripple singapore incorporated because its assets are its ideas as people it's technology it's not it's warehouses and books and inventory so no doubt that scenario is a doomsday scenario but even then i'm not sure and i don't think that xrp dies it's too far ahead of the competition it just suffers a major setback as ripple has to pay millions of dollars of fines has to stop dealing with u.s based investors and goes through a complete reincorporation but the bottom line of the great summation is that in my opinion the upside to xrp especially in the short term greatly outweighs the downside by at least two to three times i bought in at under 30 cents as much as i can afford to lose because that's how to approach speculative investments as for a time frame i expect the xrp price to be artificially suppressed for six to nine months perhaps a year the kick interactive case went pretty far into the litigation and it was concluded in little more than a year so that is my long-term scenario and six months would be for a settlement on the short side but we'll know more about time frames after the february 22nd pre-trial and there you have it the great summation of what i have been investigating over the last month the remote remote possibility of a complete loss of xrp with a likely two to three time return in six to nine months what are your thoughts good scenarios for xrp bad let me know i only do crypto vlogs once a week so i read all your comments for better or worse so please leave one below so i can learn from you as i hope you learn from me thank you