Bill Morgan has weighed in on discussions regarding the XRP lawsuit while the crypto community awaits the judge’s ruling. Morgan responded to a Twitter user, Marc Fagel, who’s been debating the XRP lawsuit with John Deaton.
Morgan noted that Judge Torres was clear regarding her line of judgment on the Ripple case. Notably, the main issue in the case is whether or not Ripple sold XRP as a security.
In Bill Morgan’s opinion, Judge Torres will base her judgment on facts regardless of the SEC’s broad and undefined position. Also, Ripple argues that it did not require registration since it didn’t sell XRP as an investment contract.
Judge Torres made it very clear in the Daubert motion decision that the issue she must decide is whether Ripple sold XRP as a security despite the SEC taking broader positions at times in this litigation that seemed to suggest any sale of XRP was an investment contract or /1 https://t.co/HL1mclv8Xg pic.twitter.com/BrcHGAQlG9
— bill morgan (@Belisarius2020) May 8, 2023
However, the SEC took a broader stand that all XRP sales are securities, relying on the first allegation that Ripple distributed XRP through statutory underwriters.
Morgan is unsure how Judge Torres will decide the case and why the SEC overstretches its positions towards XRP sales in the secondary market.
Morgan noted that the SEC argues that Ripple’s XRP continuous offering in the secondary market violates securities law, stretching toward ODL customers who are not investors. In addition, he said that all XRP sales occur in the secondary market since Ripple has only offered XRP to ODL partners since 2020.
He also responded to the founder of Crypto Capital, Justin Bons’ comment that Ripple’s defense hinges on XRP decentralization. According to Morgan, Ripple’s defense does not hinge on the XRP ledger’s decentralization but on the Howey test application.
However, the court is yet to decide the factual relevance of decentralization based on the Howey test.
Recall that John Deaton called out the SEC on May 5 for its broad and undefined position on the XRP lawsuit. Deaton further noted the SEC couldn’t tag XRP as security since the sales do not meet the prongs in the Howey Test.
The attorney weighed in again today, noting specific things that should change in the SEC. The US-based lawyer said Congress should pass a law prohibiting regulators from leaving to work at a firm they previously regulated for at least three years.
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