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Crypto lawyer Jesse Hynes expressed hope that the court supervising the Securities and Exchange Commission’s (SEC) legal action against Ripple would declare $XRP a non-security digital asset.
According to Hynes, if the court decides to look into whether or not $XRP is a security, then this decision might be made. The former Gala Games CLO, Hynes, has taken to Twitter to comment on the latest developments in the litigation.
Hynes claims that it is possible that the court would rule that the first $XRP sales violated U.S. securities laws. He added that the court might decide that Ripple’s existing sales practices do not violate securities laws.
I think your summary is sound and a distinction between early and later sales can lead to a conclusion that a digital asset can change from a security to not being a security but it would be more consistent with 1) The economic reality, 2) the technology, 3) the law, /1 https://t.co/j1Snm9tIka
— bill morgan (@Belisarius2020) May 22, 2023
As the crypto lawyer pointed out, whether the court will rule whether $XRP is a security is unclear. However, according to Hynes, the court may feel obligated to issue a ruling because the SEC has been so focused on $XRP’s status.
Bill Morgan’s views on the lawsuit
Bill Morgan, another crypto-focused lawyer, echoed Hynes’ appraisal of the new developments in the litigation on Twitter. Morgan emphasized the possibility that digital assets might move from being regarded as securities to non-securities based on the timing of the transactions.
Morgan said that $XRP sales to Ripple’s on-demand liquidity (ODL) customers might bolster the case for $XRP’s designation as a non-security digital asset.
He said the judge recognized the difference between programmatic and institutional sales of $XRP was evident in her recent decision to reject his request to seal the Hinman papers.
William Hinman, the former director of corporation finance at the SEC, commented that ethereum was a non-security asset in internal conversations and remarks in the Hinman papers.
These opinions from crypto legal experts hint at a possible change in the categorization of $XRP, but the result of the SEC v. Ripple litigation is still up in the air.