In a recent series of tweets, Bill Morgan, a digital investment enthusiast, and lawyer, expressed his concerns about the Securities and Exchange Commissionโs (SEC) stance on Rippleโs XRPย Rippleย (XRP) sales. Morgan argues that the SECโs attempts to categorize all XRPย Rippleย (XRP) cryptoย tokens as financing contracts face a wholeย lotย of hurdle when seeingย as a โsmall subsetโ of sales made to On-Demand Liquidity (ODL) customers.
XRPย Rippleย (XRP) fails to qualify as a security
โThey just doย not appearย to fit any part of the Howey test. No investment. Even the SEC alleges they are dealt with by ODL customers immediately. No expectation of profit because they are being used as a bridge, not held. No common enterprise.โย
Morgan outlines that the sales to ODL customers doย not seemย to meet the criteria set by the Howey test, a judicialย system used to determine whether an financing qualifies as a security. He notesย that that these sales doย not involve financing intentions, as ODL customers use XRPย Rippleย (XRP) as a bridge currency and promptly transform it. Inย addition, thereย is no common enterprise, as ODL users are merely customers utilizing a product.
This poses a challenge for the SEC, as seeingย as these sales as exceptions would undermine their argument that all XRPย Rippleย (XRP) is a security or represents an financing contract. The notion that XRPย Rippleย (XRP) itself is security collapses, as all XRPย Rippleย (XRP) cryptoย tokens are fungible.
Likewise Read: Secret Ripple-SEC Discussions Exposed: Will XRPย Rippleย (XRP) Lawsuit Take A U-Turn? โ Coinpedia Fintech News
Morganโs Arguments
Morgan notesย that two other exceptions that challenge the SECโs argument: the giveaways of XRPย Rippleย (XRP) to early adopters and developers, likewise as donations to charities. The SEC has made no states regarding these transactions, indicating that those XRPย Rippleย (XRP) cryptoย tokens were not considered financing contracts.
Nonetheless, the SECโs assertion that all XRPย Rippleย (XRP) cryptoย tokens are fungible establish a predicament. As Morgan describes, if some XRPย Rippleย (XRP) cryptoย tokens given away, gifted, or sold to ODL customers are not financing contracts or securities, then it logically comesย after that all other XRPย Rippleย (XRP) cryptoย tokens, which are fungible with them, cannot be considered securities either.
Morgan Divulges His XRPย Rippleย (XRP) Holdings
In a separate tweet, Morgan makesย itย clearย that the XRPย Rippleย (XRP) he owns were some of those atย theย beginning given to early adopters or gifted to charities, which the SEC does not allege as financing contracts. He claimsย that his XRPย Rippleย (XRP) holdings, although fungible with other XRPย Rippleย (XRP) cryptoย tokens, are unequivocally not securities, attributing his ownership to fortunate circumstances.
