The cryptocurrency industry eagerly awaits the conclusion of the lawsuit filed by the United States Securities and Exchange Commission (SEC) against Ripple. In the midst of this legal battle, a pro-XRP legal expert, Bill Morgan, has offered additional arguments supporting Ripple’s position.
In a discussion involving Mr. Huber, a well-known XRP community member, and former SEC enforcement lawyer Marc Fagel, Morgan raised some pertinent questions. He questioned why the SEC did not file for an injunction if Ripple had engaged in any nefarious or illegal activities beyond “selling unregistered securities.” Morgan argued that if Ripple’s actions were clearly illegal and damaging to investors, the SEC should have sought protection for investors.
Morgan further explained that the SEC refrained from filing an injunction because, since May 2020, Ripple has only been involved in on-demand liquidity (ODL) sales. The SEC would risk weakening its argument that XRP is a security if it acknowledged that ODL sales are not investment contracts. ODL customers transact XRP within seconds for fast, cheap cross-border payments, which do not constitute investments.
Previously, Morgan highlighted the distinction between programmatic sales or open market exchange trades of XRP and sales through Ripple’s ODL system. He argued that XRP sales to ODL customers cannot be investment contracts because there is no investment intent or expectation of profits by these customers, who hold XRP for a short time and use it for consumption purposes.
Morgan also criticized the SEC’s practices, claiming that they fail to achieve clarity. He cited the example of Dash (DASH), which the SEC suddenly deemed security nine years after its launch in 2014, despite there being no indication that Proof-of-Work (PoW) tokens mined like Dash were securities.
As the lawsuit continues, the price of XRP stands at $0.4815 at the time of publication. It has experienced a slight decrease of 0.28% in the last 24 hours, a drop of 0.86% over the previous seven days, and a more significant decline of 8.77% on the monthly chart as of July 3rd.
