Ripple vs SEC : Bill Morgan Clarifies SEC’s Position on XRP Sales

The debate around XRP and whether its sales count as securities just took a sharp turn, thanks to insights from renowned lawyer and crypto enthusiast  Bill Morgan. Recently, Morgan went on Twitter to shed more light on the matter. His point? There’s a lot of confusion out there, and he’s here to sort it out.

It all started when Morgan heard that SEC former director John Reed Stark said that the judge overseeing the Coinbase-SEC case has completely disagreed with Judge Torres’ ruling that secondary sales of XRP can’t be investment contracts or unregistered securities.

Morgan was straightforward to debunk Stark. He said the statement was just plain wrong, adding that Torres made no such finding that secondary market sales of XRP can’t be investment contracts, so what then would Failla be disagreeing with?

Fellow legal expert Marc Fagel came for Morgan, saying that it is hard to imagine how any sale of tokens through an exchange would satisfy Torres’ Howey standard.

Morgan fired back saying he respectfully disagreed with Fagel. He explained that Torres’ reasoning was on specific Ripple programmatic sales because that was one of only three categories the SEC put before her to consider.

Morgan went on to say that the totality of specific circumstances before her, Torres found the programmatic sales were not investment contracts. One of those important specific facts was the promotion of XRP by Ripple to secondary market investors. 

He acknowledged that Torres did find evidence of Ripple’s promotion of XRP to institutional investors but not evidence of more widespread promotion. Such scenario cannot be indiscriminately applied to other cryptocurrencies like Solana.

The Howey test is a fact specific test, so therefore, why should the finding of Torres about programmatic XRP sales mean no secondary market sales of cryptos on exchanges are ever investment contracts? 

He said, simply, “The answer is it doesn’t mean that.”

The finding of Torres on Ripple promotion was on the uncontested evidence. There is no obvious error of fact and in Morgan’s opinion, the SEC’s appeal prospects are quite poor.

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