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Ripple looking like a true cowboy coin and a total sham run by con artists.
Ripple or XRP as we know it has run foul of the law with the Securities and Exchange Commission (SEC) filing a case against them. Over the last few hours Coinbase and a few other exchanges have seized trading of Ripple entirely. If I had any I would have moved it already and sold it for whatever I could on whatever exchange was allowing trades to happen. Surely this door will be closing very quickly leaving plenty holding large bags that are now worthless.
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The problem comes down to the Howey Test which dates back to 1946 and how the SEC evaluates risk and protects investors. Basically it involved a company who had a citrus farm and they leased out a large portion of the land to raise capital for other projects and developments. The investors who took up the lease thought that the farming of the citrus would be done by someone else with knowledge and skills.
The company ended up in the Supreme Court who ruled in the favor of the investors as the Howey Citrus farm had not registered the contracts for the leasing of the land. The investors believed and were sold with the idea they were investing in the farm as a going concern and would just share in the profits. The value in the contract was the actual work that was going to take place ie farming and selling of the produce as the land was actually irrelevant to them.
Crypto currencies are meant to be decentralized and where the Howey Test is called upon is whether the coin is speculative or reliant on the work of a third party. If a coin is regarded as a security then it has to be registered at the time of offering before the ICO is launched.
Now you can see why XRP is not in a good place as the founders didn't file any paperwork and sold roughly $1.4 billion of Ripple with no proof of it's existence. Call it what you like, but if this is not fraud or a cowboy coin then what is it exactly as it is literally worthless then.
Market makers have pulled the rug out and have liquidated support for XRP so good luck to anyone stupid enough to be holding any still this evening. The question is who will the SEC go after next as Ripple were not the only ones who did things illegally. Where does the likes of Steem sit with their Ninja Mine as that was a cloak and dagger operation if I ever saw one. How many others are out there in the same boat as Ripple right now and glad I am holding Hive with coins on Leodex .