The SEC recently filed Form C appealing a court ruling on Ripple’s XRP sales. The call focuses on three key points: the sale of XRP through exchanges, Ripple’s distribution of XRP to employees, and the sales by executives Brad Garlinghouse and Chris Larsen. Ripple’s chief legal officer has now suggested that a Form C application may be submitted next week, which many are keen to see.
On the Good Morning Crypto show, James Murphy, aka MetaLawMan, opened up about Ripple’s upcoming filing. He is hopeful that Ripple’s appeal will be better received at the superior court level, where judges can delve deeper into these nuances. James claims that the relationship between XRP holders and Ripple is fundamentally different from that of traditional investors and companies, which could influence 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 directly benefit from Ripple’s profits or activities. He believes that previous court rulings on cases like Telegram have misinterpreted the nature of these digital tokens, leading to confusion about what an investment contract is.
Ripple’s Potential Arguments
He believes Ripple will argue that its sales to institutional investors and certain transactions on the On-Demand Liquidity (ODL) platform are not investment contracts. He thinks the ODL argument is quite strong.
James explained that Ripple considers these sales as wholesale contracts, suggesting that the goal was for institutions to resell XRP rather than invest directly in Ripple. He believes that if someone wants to invest in Ripple, they should buy its shares, not XRP.
He expressed hope that if Ripple can successfully challenge the court’s ruling, it can withdraw the fines imposed, which are calculated based on the number of transactions involving institutional sales and OAO, totaling $125 million.