Crypto Community Divided Over Security Designation of XRP

X user Joe Sho and crypto lawyer Bill Morgan debated the legal status of Ripple’s XRP. Sho, in a tweet, expressed uncertainty about the legal clarity surrounding XRP, prompting a response from Morgan that sheds light on the intricacies of the matter.

I think there is, definitely Joe. Only some Bitcoin maxis who can’t read and understand a court decision or are too biased or obtuse to admit the clear words of the judge that XRP itself is not a security disagree. Then there was the subsequent letter to the court from the SEC… https://t.co/m1bDlqtpEi

— bill morgan (@Belisarius2020) November 29, 2023

“I think there is, definitely, Joe. Only some Bitcoin maxis who can’t read and understand a court decision or are too biased or obtuse to admit the clear words of the judge that XRP itself is not a security disagree,” stated Morgan in his reply, pointing to a divergence of opinion within the cryptocurrency community.

Morgan further highlighted a significant development, referencing a letter from the Securities and Exchange Commission (SEC) to the court. The letter explicitly stated that the SEC was not seeking review of the finding that XRP is not a security.

In another exchange of conversation on X, Ripple’s Chief Technology Officer (CTO) recently delved into the complexities of U.S. securities law in a tweet. The CTO spoke regarding tokens as securities, highlighting the Howey case, a landmark decision by the Supreme Court that outlined the criteria for an investment contract.

However, the CTO noted that the “Howey test is flexible and cannot be applied robotically,” leading to various court cases determining the classification of specific arrangements. The crux of the matter, as explained by the CTO, revolves around the expectation that profits come “solely” from the efforts of others. Morgan responded, commending the CTO’s explanation as excellent for a complex topic.

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