After Ripple’s massive win in the case against the United States Securities and Exchange Commission (SEC), in which the agency dropped the charges against the blockchain company’s top executives, the cryptocurrency community is waiting to see the results of the final settlement.
Indeed, as legal expert John E. Deaton said earlier, the SEC now “wants $770M worth of flesh” over its embarrassment. However, another popular commentator on the case, lawyer Bill Morgan has explained why settling will not be as simple as just writing a check, as he detailed in an X thread on October 26.
Remedies heating up
Specifically, Morgan believes that the remedies phase, in this case, would “heat up, not settle,” as he shared the arguments from the letters that each of the parties had earlier sent to the court regarding the SEC’s (now blocked) motion seeking an interlocutory appeal.
As it happens, according to the SEC’s letter, the agency had claimed that the remedies phase of the proceedings would be “protracted and heavily litigated” and would include additional fact and expert discovery, as the legal expert pointed out.
On the other hand, Ripple’s letter presented more details on what this would entail, such as the “further fact development on which Ripple offers and sales qualify as institutional sales.” Indeed, Morgan shared his assumption “that not all sales the SEC asserted were institutional sales were, in fact, institutional sales.”
Issue of jurisdiction
Moreover, the blockchain company also stated that this phase would involve the clarification of “whether the SEC has jurisdiction over institutional sales transactions, considering that Ripple argued that “many did not touch the USA” and that “the court has not yet ruled on this issue,” as the lawyer explained.
Finally, in Morgan’s words, the “incredibly important and obviously highly contentious” issue is whether post-complaint sales of XRP to sophisticated commercial counterparties were in violation of securities laws, considering that most of these sales were to on-demand liquidity (ODL) customers for cross-border payments.
As he added, “the amount at stake for such sales is very large and more than the amount for institutional sales referred to in the SEC complaint,” and they “most clearly do not seem to be investment contracts because the ODL customers do not invest in XRP and don’t expect profits from investing in it.”
Finally, Morgan concludes that “it was an undisputed fact [between] the parties that ODL transactions take seconds to complete,” adding that he didn’t think the matter was “as simple as Ripple just writing a check” at this time.
Elsewhere, the XRP token that was at the center of the whole courtroom ordeal was at press time changing hands at the price of $0.54974, which represents a decline of 1.23% on the day but still an increase of 7.93% across the week, as well as a 10.13% gain on its monthly chart, as per data on October 27.
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