- Judge Analisa Torres, presiding over the SEC vs. Ripple lawsuit, has gained substantial understanding of Ripple’s past and current operations.
- Australian-based attorney Bill Morgan emphasizes that both Judge Torres and the SEC don’t seem concerned about Ripple’s XRP sales to On-Demand Liquidity (ODL) clients.
Attorney Dissects Judge Torres’ Understanding of Ripple’s Operations
In the SEC vs. Ripple lawsuit, several legal experts have been closely scrutinizing Judge Analisa Torres’ orders regarding the requests from both parties to seal documents linked to the summary judgment. Legal practitioners such as pro-XRP attorneys John Deaton, Jeremy Hogan, and James K. Filan have all weighed in on the matter. Australian-based lawyer Bill Morgan is among the latest to offer his analysis on the recent court developments.
Through a Twitter thread, Attorney Morgan expressed his views on Judge Torres’ most recent order about sealing requests. He believes that the nature of the order indicates that Judge Torres has accumulated significant insight into Ripple’s business activities, both past and current.
He emphasized that Judge Torres appears to comprehend that Ripple’s previous business was heavily oriented towards institutional and programmatic sales of XRP, while the company’s current focus is on selling XRP to On-Demand Liquidity (ODL) clients. Morgan referenced a section of the judge’s ruling in which the court sanctioned the redaction of materials linked to Ripple’s XRP sales to ODL clients, denoting the ‘product’ as a crucial aspect of the company’s operations.
Judge Torres and SEC’s Stance on Ripple’s XRP Sales to ODL Clients
Interestingly, when Ripple was unable to demonstrate that public exposure of its past institutional and programmatic XRP sales could harm its current and future business, the judge held a differing view. Attorney Morgan found it intriguing that Judge Torres perceives ODL as a product, inferring that XRP sales to ODL clients are part of a product rather than a common enterprise.
In addition, the lawyer shared evidence of the SEC not opposing Ripple’s motion to seal its financial statements from 2020 onwards. Morgan believes the SEC didn’t contest Ripple’s request because they were aware that Ripple had halted institutional and programmatic sales of XRP. The attorney asserted that neither the judge nor the SEC appear concerned about Ripple’s XRP sales to ODL clients.
In fact, he mentioned that considering the use of XRP in ODL, it does not appear to fulfill any aspect of the Howey test, a U.S. legal standard used to determine if certain transactions qualify as ‘investment contracts.’
A Conclusion on XRP’s Security Status
Attorney Morgan went further to posit that if Judge Torres and the SEC do not view the sales of XRP related to ODL’s ‘product’ as an investment contract, then XRP can’t be considered a security. However, he also cautioned that Ripple’s past institutional and programmatic sales of XRP might present a distinct challenge for the company.
Moreover, Morgan had previously offered his commentary on Judge Torres’ ruling on the parties’ sealing requests. In response to Judge Torres denying the SEC’s motion to seal Hinman’s documents, Morgan posited that the decision is likely to benefit Ripple.