Legal Experts: Unraveling the Confusion Surrounding XRP Sales

Bill Morgan, a prominent lawyer and crypto supporter, recently clarified misconceptions surrounding the debate over XRP's status as a security. Morgan asserts that Judge Torres' ruling on secondary XRP sales being non-investment contracts remains valid, despite claims by former SEC director John Reed Stark. Morgan highlights the fact-specific nature of Judge Torres' decision and the SEC's limited allegations, arguing that her findings on programmatic sales should not be extended to all secondary market crypto sales.

Dispelling Confusion over XRP Sales: Insights from Legal Experts

The ongoing debate surrounding the classification of XRP sales as securities has witnessed a significant development, thanks to the incisive analysis of renowned lawyer and crypto advocate Bill Morgan. In a recent Twitter thread, Morgan sought to clarify the complexities surrounding the issue, acknowledging the prevalent confusion and offering his expert insights.

Morgan's analysis stemmed from a statement attributed to former SEC Director John Reed Stark, who purportedly asserted that the judge overseeing the Coinbase-SEC case, Judge Torres, had unequivocally rejected the notion that secondary sales of XRP could constitute investment contracts or unregistered securities.

Challenging this assertion, Morgan categorically refuted the accuracy of Stark's statement. He maintained that Judge Torres had made no such finding, emphasizing that secondary market sales of XRP were not expressly considered within the scope of the court's purview.

Morgan's critique was met with a counterargument from fellow legal expert Marc Fagel, who expressed skepticism regarding the potential for exchange-mediated token sales to meet the criteria outlined in the Howey test, the benchmark for determining whether an investment qualifies as a security.

Undeterred, Morgan respectfully disagreed with Fagel's assessment. He elaborated that Judge Torres's analysis was confined to Ripple's programmatic sales, one of three specific categories presented for her consideration by the SEC.

Morgan expounded that Judge Torres's evaluation of the specific circumstances surrounding Ripple's programmatic sales had led her to conclude that they did not constitute investment contracts. Crucial to this finding was Ripple's active promotion of XRP to secondary market investors.

While acknowledging Judge Torres's recognition of Ripple's promotional efforts targeting institutional investors, Morgan emphasized the absence of evidence suggesting widespread promotion beyond this limited circle. Such findings, he argued, cannot be indiscriminately applied to other cryptocurrencies like Solana.

Morgan stressed the fact-specific nature of the Howey test, asserting that Judge Torres's conclusions regarding Ripple's programmatic XRP sales should not be construed as a blanket determination that all secondary market sales of cryptocurrencies on exchanges automatically qualify as investment contracts.

He further elaborated that Judge Torres's findings regarding Ripple's promotional activities were based on uncontested evidence, leaving little room for appeal. Morgan expressed his belief that the SEC's prospects for successfully overturning the court's decision are limited.

Morgan's expert analysis provides valuable clarity amidst the ongoing debate surrounding XRP sales and their potential classification as securities. His insights underscore the complexities of the issue and the need for careful consideration of the specific facts and circumstances surrounding each case.