 As you guys know, the SEC has filed a lawsuit against XRP alleging that XRP is a security and was sold illegally as it was not registered with the SEC. This of course caused the value of XRP to fall by more than 60% and now many exchanges have also delisted or suspended the trading of XRP. So the question is, is it a security or is it not? That is what we're covering today. How to trade to help you get to that next level? So if you're new here, consider subscribing. If you've been here before, then make sure to hit that like button and leave a comment on this video. So today we are talking about the SEC versus XRP lawsuit guys. To understand what's going on, you have to understand the legal ideas behind the lawsuit. So the question is, is it a security or is it a currency? That is what they're going to be battling out over the next several months. The lawsuit will depend on the first three sections from the Howie test. Now you're probably wondering, what is the Howie test? It is a test created by the Supreme Court for determining whether certain transactions qualify as investment contracts. If so, under the Securities Act of 1933 and the Securities Exchange Act of 1934, those transactions are considered securities and therefore subject to certain disclosure and registration requirements. The Howie test provides a four part test for what a security is. And that is exactly what we're going to look at today. So although the Howie test is a four part test, we're only focusing on three parts that will actually be relevant to this lawsuit. Now the questions are, the first one, is it an investment contract? The second one, is the investment of money in a common enterprise? And the third one, was there a promise of profit? Ripple is obviously not going anywhere. They have hired some top natural lawyers and they're obviously planning on spending millions and millions defending this. Ripple responded in a statement on the 22nd of December, referring to the Howie test. So we're going to go over how they answered the Howie test in their statement. So the first question was, is it an investment? Here's what Ripple had to say. XRP is not an investment contract. XRP holders do not share the profits of Ripple or receive dividends, nor do they have any voting rights or other corporate rights. Purchasers receive nothing from their purchase of XRP except the asset. In fact, the vast majority of XRP holders have no connection or relationship with Ripple whatsoever. So the second question is, is the investment of money in a common enterprise? Ripple answers, Ripple has shareholders. If you want to invest in Ripple, you do not buy XRP, but rather shares in Ripple. So the third question is, was there a promise of profit? Ripple answered, unlike securities, the market value of XRP has not been correlated with Ripple's activities. Instead, the price of XRP is correlated to the movement of other virtual currencies. So those are going to be the main issues that the court will be focusing on during this case and this lawsuit. What the SEC will be doing is trying to find facts which show that the sale of XRP was not like the sale of a commodity or currency, but more like the sale of a common stock of a company and that Ripple took those proceeds of sales and used them to increase the price of XRP. Now the question is, will the SEC succeed in this case? So we have no idea what they might have in their possession. We don't know what the testimonies will be like or what type of agreements might have been made back in the day by a Ripple when they first formed XRP. So we have no idea. Ways that the SEC could win this case would be if they found emails, text messages, phone calls, etc. That could shift the case to their side for sure. But overall it seems like the SEC is fighting an uphill battle unless they uncover something to be able to actually prove what they're alleging. Now what they do have on their side is limitless money which goes a very long way. Now one thing to remember is that lawsuits almost never go to trial. They almost always settle. So that's probably what's to be expected at the end of all of this. So for the next several months both sides are going to be fighting back and forth and trying to get an edge and leverage anything that they can really so that they can get the better end of that settlement. Of course Ripple is not ever, never ever going to admit to any guilt whatsoever. They will most probably just have to pay a fine at the end of it and change a few structures within the company to align with SEC's rules. The crazy part is that the head of the SEC filed the lawsuit the day before he left office, which is kind of weird. It seems like he was trying to send a message to the crypto community and trying to set the standard for law and order for those who come after XRP into the crypto space. Now one last thing to consider as we now go into the presidency of Biden is how will he affect this? There's been some rumors that he's actually pro blockchain so that could definitely play a role in that case as well. So XRP did release another statement about a week ago and they said that the public and press have only heard the story from the SEC's side and will be filing our response in a few weeks to address these unproven allegations against Ripple. Then they went on to say the SEC's decision to file this action is not just about Ripple but it is an attack on the entire crypto industry here in the United States. They went on to remind everybody that's trading Ripple that the majority of their customers aren't in the US and overall XRP volume is largely traded outside of the United States. Then they ended it by saying we also look forward to working with all of the commissioners and the SEC's new leadership once appointed. That's a very key right there once appointed. Remember guys remember guys the head of the SEC filed the lawsuit and the day before he left the office. So they went on to say in all the SEC chair six of its directors from each SEC division the SEC's chief economist and the SEC's general counsel have now departed. Many left just last week. So that's why I bring up the whole thing with with the new presidency. There won't be new people heading and running the SEC which could affect the direction that this case goes into. I want to go ahead and remind you guys to if you've enjoyed this video thus far go ahead and hit that subscribe guys. Hit the notification bell so you know as soon as we put out these videos. Hit that like button and let us know if are you guys still holding XRP or did you guys sell something that happened yesterday or today. Ripple investors sues to force stock redemption on SEC claim. So yes guys Ripple got sued by another person. So it says that they were sued by a UK investment company after the US securities and exchange commission claimed the virtual tokens were sold improperly and it looks like they're pissed off because then it says it seeks to enforce its contractual right to require Ripple to redeem Sirius C preferred stock held by Tentragon and to block Ripple from using any cash or other liquid assets until payment is made. Tentragon also asked the court for a temporary restraining order, a preliminary injunction and an expedited trial. Its briefs in support of the request are also sealed. Ripple of course released a statement saying that Tentragon's lawsuit has no merit because there's been no determination that XRP is an unregistered security as the SEC claims. Under provisions of its investment agreement, Tentragon can redeem its Ripple equity if XRP is deemed to be a security on a go forward basis. So they went on to say that they are disappointed that Tentragon is seeking to unfairly take advantage of the lack of regulatory clarity here in the US and that the courts will provide the clarity and that they are very very confident in their position. So the last thing we want to tell you guys is that the first court date is set for the SEC lawsuit against Ripple guys. That's right the first court date is set and it's set to be uh it's going to be heading to virtual court on February 22nd. So the order asked that the parties file a joint statement by February 15th outlining the arguments and legal basis for the case, potential motions and the likelihood of a settlement. So that's it guys I hope you guys have enjoyed this video. Please make sure to hit that like if you guys enjoyed this video. If you guys found this content valuable make sure to hit that subscribe button as well as we continue to grow this channel and try to spread this knowledge to the community. We've been growing very fast as of late guys and I appreciate you guys for hitting that like button so many times on the previous two videos. We've been reaching all-time highs for our channel. So continue let's get 50 likes on this video guys. Let's go ahead and hit 3,000 subscribers as well. We're at 26. We're almost there guys. Thank you guys so much for watching this video. We will see you on tomorrow's video. As always peace and love.