As the cryptocurrency industry is still eagerly awaiting the conclusion of the lawsuit that the United States Securities and Exchange Commission (SEC) has filed against Ripple, a pro-XRP legal expert has offered more arguments that support the blockchain firm’s side of the legal battle.
Indeed, lawyer Bill Morgan joined a discussion that included a well-known XRP community member Mr. Huber and former SEC enforcement lawyer Marc Fagel, in which the former asked why the regulator filed no injunction at all “if Ripple did anything nefarious or even illegal besides ‘selling unregistered securities’” in a tweet on July 2.
As he further inquired:
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“What is the point of protecting investors if Ripple can continue to pursue what the SEC considers to be clearly illegal and damaging activities to investors for years after the lawsuit is filed? Shouldn’t the SEC have at least tried to file for this for the “protection” of investors?”
In response, Morgan said that the reason for this was that “since May 2020, Ripple has only engaged in [on-demand liquidity (ODL)] sales, and the SEC would risk a finding on a [temporary restraining order (TRO)]/preliminary injunction motion that ODL sales are not investment contracts as it would weaken its argument that the token itself is a security.”
On top of that, he continued:
“The SEC would need to show how there is an investment contract when ODL customers who don’t invest in the token and don’t expect profits & transacts the XRP within seconds for fast cheap cross border PAYMENTS, not investments.”
ODL versus programmatic sales
Earlier, Finbold reported on Morgan shedding his perspective on some rarely raised issues in the community. These included the difference between programmatic sales or open market exchange trades of XRP and sales through Ripple’s ODL system that allows customers to move money across borders instantly and at a low cost, without banking intermediaries.
As he said:
“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.”
More recently, Morgan also pointed out the SEC’s practices that he said were “no way to achieve clarity,” stating the example of Dash (DASH), which launched in 2014, only for the regulator to suddenly decide it is a security nine years later, “after there was no indication that [Proof-of-Work (PoW)] tokens which are mined were securities.”
Meanwhile, the XRP token that is at the center of the lawsuit was, at the time of publication, changing hands at the price of $0.4815. This indicates a decrease of 0.28% in the last 24 hours, as well as a drop of 0.86% across the previous seven days and a more significant 8.77% on its monthly chart, as per data on July 3.
