Legal expert and digital assets advocate Bill Morgan has once again stepped into the debate surrounding the classification of Ripple (XRP) as security, offering his insights on the matter.
Morgan, known for his staunch support of Ripple’s (XRP) as a non-security, shared a compelling argument based on a recent ruling by Judge Torres concerning the unsealing of William Hinman’s email drafts.
Bill Morgan Challenges XRP’s Security Classification
At the core of Morgan’s argument lies the judge’s acknowledgment of Ripple’s shift from institutional and programmatic XRP sales to sales aimed exclusively at On-Demand Liquidity (ODL) customers, which the judge herself described as a “product.”
The decision yesterday shows Judge Torres has informed herself considerably about Ripple’s past and current business. She seems well aware that Ripple’s business in the past involved institutional and programmatic sales of XRP but now is based on sales to ODL customers/1
— bill morgan (@Belisarius2020) May 17, 2023
Morgan noted the judge’s omission of the Howey test, a pivotal factor in determining whether an investment contract qualifies as a security, as a noteworthy aspect.
Moreover, the lawyer emphasized the absence of concern from both the judge and the SEC regarding the sales of XRP to ODL customers. He stressed that utilizing XRP within Ripple’s ODL system failed to satisfy any element of the Howey test, thus suggesting that XRP sales for ODL do not constitute investment contracts. Consequently, Morgan posits that XRP itself cannot be classified as a security.
He posits that if the sale of XRP for use in Ripple’s ODL “product” does not constitute an investment contract, then XRP itself cannot be deemed a security. Nevertheless, he does acknowledge that previous programmatic and institutional sales of XRP may present a distinct matter.
Just a few days ago, the digital asset enthusiast speculated on the SEC’s intentions to label XRP as a security and potentially stifle the growth of the entire crypto industry.
His argument centers around the SEC’s apparent inclination to stretch the boundaries of the Howey test through an expansive interpretation of the term “common enterprise,” avoiding the need to link it to specific transactions and instead focusing on the adjective “common.” Morgan believes that the SEC aims to argue that a common interest alone would suffice.
Morgan’s perspective emerges amidst a heated debate within the XRP community, with discussions centered on Ripple’s holdings of XRP and the potential consequences if a court were to mandate the disposal of these holdings.
Ripple (XRP) Price
As the debate rages on, the ultimate classification of XRP by the courts and regulatory bodies remains uncertain. The industry eagerly awaits further developments and clarity in this complex and closely watched case.
Interestingly, XRP has been going up in recent weeks, up over 10% in the past week. This is likely due to the overall bullish sentiment on the ongoing lawsuit.
As of the time of writing this line, Ripple’s (XRP) cryptocurrency was up 5.47% in the last 24 hours. It is currently trading at $0.4689, with a market capitalization of $24.15 billion.