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Bill Morgan clarified the SEC’s complaint is aimed at Ripple’s secondary market sales and not its programmatic sales.
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The appeal is not based on XRP’s legal status as non-security.
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The debate over whether the SEC appeal will delay the approval of the XRP ETF continues.
Bill Morgan, an attorney at Morgan Law Group, clarified that the SEC’s latest appeal regarding the Ripple case does not include secondary market sales made by retail investors. The appeal is focused on Ripple’s programmatic distribution and sales of XRP. It does not include individual transactions on exchanges.
The clarification comes after U.S. SEC, in response to Judge Analisa Torres ruling from July, filed an appeal notice on 2nd October.
Confusing SEC Appeal Scope
Morgan explained in a post to X that Judge Analisa Tores had not ruled on secondary sales of XRP. These are transactions made by individuals, such as retail investors, on exchanges. The ruling only applied Ripple’s automated sales of XRP on the open market.
Morgan stressed that secondary sales were excluded from the original ruling, and therefore cannot be included in an appeal. The SEC is focusing on Ripple’s direct sales, and any penalties that may be associated with them.
This clarification is necessary because some commentators mistakenly believe that secondary sales of XRP or Ripple’s programmed sales are the same.
Status of XRP remains unchanged
Attorney Jeremy Hogan also commented on the SEC’s appeal decision, calling it a “risky move” for the regulator. Hogan believes that the SEC has low chances of winning its appeal due to the factual nature of Judge Torres’s ruling.
Hogan believes that even if the SEC was to win, it would still result in additional financial penalties being imposed on Ripple. This would not change XRP’s status as a legal currency or its use by Ripple.
Hogan also noted that the SEC appeal will not contest the ruling that XRP is not a securities. He said that the SEC “will not (and cannot)” appeal against the ruling that XRP itself is not a financial instrument.
Hogan said that the appeal process may extend until 2025 or 2026, which would delay a final decision.
The Future of XRP ETF Remains in the air
This appeal comes as asset manager Bitwise filed for an ETF XRP with the SEC in order to provide institutional access to XRP. XRP enthusiasts are still unsure about the approval due to the ongoing legal battle between the SEC and Ripple.
A user of X expressed skepticism and stated that the ongoing SEC’s appeal could delay approval of an XRP-based ETF by six to 18 months. This is similar to the delays experienced with Bitcoin spot ETFs. Moon Lambo, however, disagreed with the user. He said that the appeal did not affect XRP’s second-market sales and would have no impact on the approval of an XRP exchange traded fund.
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