The SEC recently filed its Form C, appealing a court ruling regarding Ripple’s XRP sales. The appeal focuses on three key points: the sale of XRP through exchanges, Ripple’s distribution of XRP to employees, and the sales made by executives Brad Garlinghouse and Chris Larsen. Ripple’s Chief Legal Officer has now hinted at a potential Form C filing next week, which many are eager to see.
On The Good Morning Crypto Show, James Murphy aka MetaLawMan opened up about the impending filing by Ripple. He is hopeful that Ripple’s appeal will be better received at the higher court level, where judges can delve deeper into these nuances. James maintains that the relationship between XRP holders and Ripple is fundamentally different from that of traditional investors and companies, which could sway future decisions in Ripple’s favor.
James argues that the SEC’s interpretation of XRP as a security fails to consider that XRP holders do not benefit directly from Ripple’s profits or operations. He believes past court rulings on cases like Telegram misinterpreted the nature of these digital tokens, leading to confusion about what constitutes an investment contract.
Potential Arguments by Ripple
He thinks Ripple will argue that its sales to institutional investors and certain transactions on the On-Demand Liquidity (ODL) platform aren’t investment contracts. He finds the ODL argument quite strong.
James explained that Ripple views these sales as wholesale contracts, suggesting that the goal was for institutions to resell XRP rather than invest in Ripple directly. James feels frustrated that old legal frameworks are being applied to new technologies like cryptocurrency.
He expressed hope that if Ripple can successfully challenge the court’s ruling, it could remove the imposed penalties, which were calculated based on the number of transactions involving institutional sales and ODL, totaling $125 million.
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