Ripple v. SEC case

Ripple v. SEC case update 30 June 2023

Ripple v. SEC case update

Ripple v. SEC case update Lawyer Bill Morgan has provided his perspective on some infrequently asked questions as the cryptocurrency community waits for the decision in the dispute between the United States Securities and Exchange Commission (SEC) and blockchain company Ripple.

As it turns out, Morgan distinguished between XRP sales made programmatically and sales to customers of on-demand liquidity (ODL), whereas “the preference seems to be to distinguish early and later sales rather than types of sales,” he explained in a Twitter thread on June 29.

Comparing ODL and programmatic sales

With regard to programmatic sales, he specifically mentioned Ripple’s ODL system, which enables users to send money across borders quickly and cheaply without the need for correspondent banking relationships or the pre-funding of accounts abroad.

According to the lawyer:

“My theory is Ripple XRP sales to ODL customers cannot be investment contracts because there is no investment or investment intent by ODL customers and no expectation of profits by ODL customers who hold XRP for a very short time and use it akin to consumption.”

Additionally, Morgan claims that because market makers were facilitating the XRP programmatic sales, in part through cryptocurrency exchanges, “through the blind bid/ask transactions,” Ripple had no knowledge of the retail users. ” According to him:

“The SEC would be in a stronger position in this litigation if it had limited the complaint to programmatic sales instead of alleging a single 8-year undifferentiated offering that includes very different types of sales such as sales to ODL customers.”

Additionally, Ripple’s decision to only direct XRP sales to ODL customers and its decision to halt programmatic sales shortly after the SEC’s September 2019 warning, “in which the SEC staff told Ripple the SEC was likely to view sales of XRP as securities transactions,” furthered worries regarding the programmatic sales.

However, as Morgan acknowledged, this “does not mean Ripple believes the SEC is correct, but it shows a higher risk at least that programmatic sales are investment contracts.”

No ‘secret plot’

Meanwhile, in a recent video, pro-XRP defense lawyer John E. Deaton shot down rumours of a “secret plot” in the court case while highlighting his involvement, the support of over 76,000 XRP investors, the sizeable sums of money that went into Ripple’s defense, and the harm done to XRP’s reputation.

In a paper he co-authored with Marisa Tashman Coppel, Chief Policy Officer of the Blockchain Association Jake Chervinsky argued that SEC Chair Gary Gensler had incorrectly assumed that all cryptocurrencies were securities and that, as a result, federal law required that he recuse himself from all enforcement decisions relating to crypto assets.

As things stand, the XRP token that is at the center of the lawsuit is currently changing hands at the price of $0.4762, which indicates an increase of 1.54% on the day but still a decline of 3.89% across the last week and a 6.05% drop over the previous month, as per data retrieved on June 30.


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