Bill Morgan recalled that in the case against Ripple, the SEC hopes to build a prosecution side around the classification of XRP as a security.
Morgan argues that the SEC’s case against Ripple is based on the regulator’s attempt to substitute the true intrinsic content of the asset with a definition of its possible legal role in the secondary market.
Bill Morgan said he fully supports the argument made by Ripple’s lawyer, John Deaton, who has strongly disagreed with the SEC’s treatment of the cryptocurrency XRP as an investment contract.
“The Commission interprets the Howey test so broadly that the boundaries of interpretation cannot be defined in either space or time. In fact, this amounts to proof that Ripple offered the world XRP.
That said, the SEC continues to argue: every secondary sale of XRP from the beginning of time to the end of time is consistent with all three aspects of Howie,” John Deaton wrote on Twitter.
According to Morgan, if the judiciary upholds the SEC’s position on XRP in the secondary market, it will have far-reaching implications for the entire crypto industry.
In particular, the SEC will have free hands to classify other crypto-assets, such as Algorand and DASH, as securities.
Earlier, Bill Morgan suggested that the Coinbase exchange would not exclude bitcoin and ether, even under pressure from regulators, because those cryptocurrencies account for 65% of trading volume.