đšSEC vs. Ripple Case: Programmatic Sales Ruling Sparks Debate
On Sunday, December 29, the SEC v Ripple case reignited debate about the court rulings. Pro-crypto lawyer Bill Morgan reacted to Fox Business Senior Correspondent Charles Gasparinoâs criticism of Judge Analisa Torresâ ruling in the case.
Gasparino called the Ripple case unnecessary but questioned the Summary Judgment, claiming the Judge set a precedent for lower disclosure standards for retail investors.
Morgan highlighted that the Judge ruled on the evidence, noting that the SECâs evidence was weak regarding the expectation of profit prong of the Howey Test. He also underscored the significance of Amicus Curiae attorney John E. Deatonâs evidence that âretail buyers didnât expect profits from Rippleâs efforts or even know about Ripple.â
Gasparino criticized what he considered contradictions in Judge Torresâ interpretation of securities law. He argued that Rippleâs private institutional offerings (which require minimal disclosures) violated securities laws, while public sales (which typically require full disclosures) were deemed not to be securities transactions.
SEC Appeal Filing Looms Leaving XRP Investors on Edge
The ongoing debate underscores the caseâs complexities. The SEC could address perceived evidentiary shortcomings in its appeal-related opening brief.
The SEC must file its opening brief by the January 15 deadline and will give investors an understanding of whether the agency has sufficient evidence to overturn the rulings.
For XRP investors, the Programmatic Sales of XRP ruling is significant. In July 2023, Judge Analisa Torres ruled that programmatic sales of XRP did not satisfy the third prong of the Howey Test.
If the SEC successfully appeals, XRP may fall under its regulatory purview. This would likely lead to US crypto exchanges delisting XRP to avoid violating US securities laws. Demand for XRP would likely materially weaken in such a scenario.