As a seasoned analyst with decades of experience navigating the complex world of financial regulation, I find Bill Morgan’s insights particularly insightful and compelling. His perspective, grounded in a deep understanding of both traditional securities law and the unique characteristics of cryptocurrencies, provides a valuable counterpoint to the SEC’s stance on crypto regulation.
In a string of sharp comments directed at the US Securities and Exchange Commission (SEC), lawyer Bill Morgan – who supports XRP – has underscored what he perceives as multiple courtroom successes against the SEC’s method of crypto regulation through enforcement. His statements refer to several recent instances where federal judges have expressed doubt over the SEC’s position that cryptocurrencies like XRP are considered securities.
Why The SEC Lost: Pro-XRP Lawyer
Bill Morgan’s assessment points out three separate court decisions that jointly weaken the Securities and Exchange Commission’s (SEC) ongoing argument that cryptocurrencies should be classified like traditional securities according to legal standards. Morgan highlighted these judicial opinions’ importance in determining the future regulatory structure of digital currencies via platform X, stressing their potential impact on the field.
In the legal case between the SEC and Ripple, Judge Analisa Torres distinguished the digital currency XRP from typical securities. Morgan explained, “Judge Torres in the SEC vs. Ripple stated to the SEC that the XRP token is not inherently a security.” Additionally, he referenced the judge’s assertion that “the digital token XRP, by itself, does not meet the criteria of being a ‘contract, transaction,’ or ‘scheme’ that fulfills the Howey test for an investment contract.”
In the SEC vs. Payward Inc., also known as the Kraken case, there was growing doubt among judges regarding the SEC’s stance on crypto tokens being classified as investment contracts. This doubt was emphasized by Judge William Orrick, who advised the SEC to avoid equating crypto tokens with traditional investments such as orange groves. In fact, he stated that “cryptocurrency tokens are no more securities than orange groves,” highlighting his skepticism towards this comparison.
In simpler terms, Judge Orrick advised the Securities and Exchange Commission (SEC) to make sure they clearly differentiate between cryptocurrencies as assets and the sales of those assets. Essentially, he’s saying that if the SEC intends to claim that the individual tokens used in transactions on Kraken are investment contracts or securities, their argument won’t hold up.
In addition, Morgan cited the SEC versus Binance lawsuit, where Judge Ketanji Brown Jackson ruled against the SEC’s argument that a cryptocurrency token is essentially an investment contract. Instead, she explained that in specific situations, these tokens might simply be the topic of an investment contract.
According to Morgan’s observation, Judge Jackson firmly dismissed the Securities and Exchange Commission’s (SEC) idea that a cryptocurrency token represents an investment contract by default. Instead, he suggested that under specific conditions, these tokens might be connected to an investment contract.
His critique concludes with a thought-provoking question that queries the Securities and Exchange Commission’s existing regulatory system: “Isn’t it time for the SEC to abandon the outdated embodiment theory or any remaining belief that courts might someday consider cryptocurrency itself as a security, after so many court judgments of this nature?”
Surprisingly, it appears that what’s been done isn’t sufficient yet. In a move that has sparked much debate, the Securities and Exchange Commission (SEC) issued a Wells notice to the NFT marketplace OpenSea on Wednesday, claiming that the NFTs traded on their platform might be categorized as unregistered securities.
At press time, XRP traded at $0.5605.
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2024-08-30 11:41