- Bill Morgan recently highlighted the controversy surrounding XRP sales to Ripple’s ODL customers.
- The crypto lawyer believes that the difference between XRP’s programmatic and ODL sales is significant for the lawsuit.
- Morgan asserted that the XRP sales to ODL clients cannot be deemed investment contracts by the SEC.
Bill Morgan, a lawyer who is popular among crypto circles on Twitter, recently shared his take on the issue of Ripple’s XRP sales to its on-demand liquidity (ODL) customers. This issue has been underreported despite being cited by the U.S. Securities and Exchange Commission in its lawsuit against Ripple.
Bill Morgan took to Twitter earlier today to highlight the difference between the programmatic sales and the ODL sales of XRP by Ripple. According to the crypto lawyer, the difference is significant in the context of the lawsuit, given that it may lead to inferences that the XRP community may not be prepared to consider.
“My theory is Ripple XRP sales to ODL customers cannot be investment contracts because there is no investment or investment intent by ODL customers and no expectation of profits by ODL customers who hold XRP for a very short time and use it akin to consumption,” Morgan tweeted.
The crypto lawyer further argued that Ripple wasn’t aware of the retail users of the programmatic sales of XRP since these sales were facilitated by market makers, partly through crypto exchanges. According to him, the SEC would be in a stronger position in the lawsuit if it had limited its complaint to the programmatic sales in question.
The concerns around the programmatic sales are only strengthened by the fact that Ripple paused them shortly after the SEC issued a warning to the company in September 2019. Morgan believes that Ripple sensed the risk associated with those sales from a securities standpoint and therefore stuck to the ODL sales.
Bill Morgan has highlighted the XRP sales to ODL customers several times over the past few months. Last month, he told his Twitter followers that the SEC would have a tough time proving that XRP is a security since the infamous Howey Test could not be applied to the ODL sales.
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