Ripple and XRP say they are about to be sued by SEC

Over the decade I've been following and writing about cryptocurrencies it has become a reliable indicator when "friends that don't know much about crypto ask me about crypto" that we are approaching a top. Right on November 24th I had a text message exchange with a friend I had not heard from in a long time. He asked if I was watching XRP.

I am careful to not advise people what to do with their investments. I never tell people an absolute thing to do. Instead I try to make them think about their own current psychology. I have a saying I try to beat into everyone I mentor... "if you're bragging... you should be taking profits!"

I cautioned my friend that if he felt the need to reach out and talk about it that he was likely under the effect of euphoria due to massive paper profits. Instead, he countered something to the effect that he was relying on this one trade for his retirement portfolio; that it was a "long term hold."

Long Term Hold is a phrase in the newbie trader vernacular I have come to despise. It does not really mean what they think it means. More often than not it is a veiled excuse to refuse to take smart profits or hold onto a catastrophic loss hoping it will get better.

Refusing to take off some risk when something is up over 200% in a month is just stupid. Now today there is a "fundamental reason" for the decline of XRPUSD though anyone watching the price chart would see that its volatility would make it the most likely candidate for a selloff. As of writing it is holding a 50% retracement level but that is only after failing to retest the highs of November.

From Fortune.com:

Ripple, one of the most important companies in the cryptocurrency industry, said Monday evening that the Securities and Exchange Commission is poised to file a bombshell lawsuit against the company over the alleged sale of unlicensed securities.

The lawsuit will also name Ripple CEO Brad Garlinghouse and cofounder Chris Larsen as defendants, according to Garlinghouse, who told Fortune the agency will file the case in the near future.

Judith Burns, a spokesperson for the SEC, declined Fortune’s request for comment about the lawsuit or to confirm that there would be one.

If the agency does sue Ripple, the action will follow years of debate between the company and the agency about whether XRP, a digital currency associated with Ripple, is a security, like a share of stock—which must be registered with the agency—or is instead a currency and thus beyond the SEC’s purview. XRP is the third most valuable cryptocurrency, and currently has a market cap of $23 billion.