Secondary Market Status Safe Despite SEC Appeal

On Wednesday, the US Securities and Exchange Commission (SEC) officially initiated an appeal process against the final ruling in the case against Ripple Labs. The specific grounds of the SEC’s appeal remain undisclosed so far, leaving the XRP community in the dark. However, pro-XRP lawyer Bill Morgan has clarified via X that the secondary market status of XRP, e.g. its sale on crypto exchanges in the US, is not up for debate.

XRP Status On Secondary Market Is Safe

Morgan highlights the distinction between different types of sales, emphasizing the nature of those that were contested in court. “There is some confusion in this matter about the issue of secondary sales,” Morgan notes on X, explaining, “Some people treat Ripple’s sales by the programmatic means to retail investors via exchanges as secondary sales.”

Morgan elaborated that the court’s decision did not address secondary sales. He writes, “Judge Torres did not rule on secondary sales in the sense of sales made by you and I if we go onto an exchange and sell XRP to other retail investors.” He points out that this particular type of transaction remains outside the scope of the appeal. “The judge made this clear in a footnote in the summary judgment decision,” Morgan adds, clarifying that “That issue was not decided and therefore cannot be the subject of the appeal.”

The scope of the SEC’s appeal, according to Morgan, is narrowly focused. “The appeal in terms of liability is limited to the programmatic sales or other sales and distributions of Ripple,” he states. Morgan also suggests the appeal could expand into other legal territories: “The appeal could of course extend to issues concerning the penalty, injunction, and disgorgement issues.”

In a recent conversation, Morgan recalled discussions with former SEC attorney Marc Fagel. “I recall that we both agreed that it was most likely, although not certain, that the appeal will be limited to the issues concerning programmatic sales and other distributions,” he shared, indicating a consensus on the likely focus of the SEC’s challenge.

Meanwhile, FOX Business journalist Eleanor Terrett brought attention to the procedural aspects of the appeal process via X today. She reported, “The SEC has not filed its Form C with the Second Circuit yet which will detail what exactly they’re appealing. They need to do that pronto so that Ripple knows how to proceed.” She also noted that Ripple is on a deadline for its response, saying, “Ripple also has 14 days from today to file a cross-appeal if they choose to.”

Expectations are high within the legal community that Ripple will respond with a cross-appeal. Morgan commented on this, stating simply, “I find it difficult to believe Ripple will not file a cross-appeal.” Fred Rispoli, founder of HODL Law, forecasted via X, “SEC appeals. Ripple will cross appeal. SEC’s company-ending district court cases against Coinbase and Kraken continue. Life continues. Don’t freak out.”

Notably, Ripple’s Chief Legal Officer (CLO) Stuart Alderoty also suggested in his latest post on X that a cross-appeal is being considered, signaling ongoing strategic planning within Ripple in response to the SEC’s legal moves.

At press time, XRP traded at $0.5281.

Featured image created with DALL.E, chart from TradingView.com