Crypto Lawyer Responds to Criticism of Ripple’s Lawsuit Against SEC

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An XRP enthusiast named Bill Morgan shared a screenshot from Ripple’s Q4 2022 report indicating that the company sold XRP only in connection with ODL transactions. The SEC has decided not to enjoin the present XRP sale, he continued, adding that this has been going on since 2019.

Taking to Twitter, he wrote, “My theory John is when Ripple was being investigated in 2019 and told to stop selling XRP they decided to limit sales to ODL users knowing such sales don’t fit Howey. Basically not any prong. Why otherwise limit sales to ODL transactions and use.”

Because there is no expectation of profit in the current selling of XRP, it is not a security if it is solely being used for ODL transactions and not as an investment. The San Francisco-based Ripple Labs was charged by the SEC in December 2020 with marketing unregistered securities in the form of XRP without providing sufficient notice. 

Using the example of the case of Stacks (STX), a Twitter user named Jay’V thinks that Ripple and other cryptocurrency projects should register their tokens with the SEC. Hiro, formerly Blockstack, said in 2021 that its Stacks token (STX) was no longer secure and that it will stop filing yearly reports with the SEC as a result.

A user claimed in 2021, “Hiro (formerly Blockstack PBC) has filed a 2020 annual report with the SEC. We expect this to be our last annual filing, as we no longer treat Stacks (STX) as US securities. This concludes a two-year journey; we anticipate filing an exit report.”

In light of these updates, the SEC has increased its regulatory control of the cryptocurrency sector over the past week, prompting harsh criticism from certain industry participants who assert that the agency’s approach may be biased.