The U.S. SEC has initiated an appeal in its case against Ripple following a federal judge's ruling that the SEC failed to prove that Ripple violated securities laws through its sales of XRP to retail customers.
A recent discussion on X has sparked debate about Ripple's legal strategy following its ongoing case with the SEC. A user quoted attorney James Murphy, known as @Metalawman, asserting that Ripple must file a cross-appeal. The user likened the situation to buying oranges in bulk from a company to sell them at a markup, suggesting that institutions buying XRP at a discount to sell to retail investors operate similarly, framing both as transactions involving commodities.
In response, former SEC lawyer Marc Fagel clarified that this perspective describes underwriting a securities offering. He acknowledged that while Ripple's lawyers might consider a cross-appeal, they would likely avoid making the argument that XRP sales to institutions are akin to commodity transactions.
However, James reacted to this and wrote, “This is misinformation. XRP is not a security. Distribution of XRP to retail is therefore obviously not a securities underwriting. Securities Law 101.”
Fagel criticized the characterization of his legal viewpoint as “misinformation,” saying that such dismissals are typical among less-informed voices on Crypto Twitter. He pointed out that the court found sales to institutional investors to constitute securities offerings, thus making their resale to retail investors distinct from securities underwriting.
Attorney Bill Morgan joined the conversation, noting that the court specifically rejected the notion that Ripple sold investment contracts to institutional buyers as underwriters. He argued that unless the SEC challenges this finding—and since it has not disputed that XRP itself is not a security—then institutions reselling XRP on exchanges for profit can indeed be likened to wholesalers selling oranges to retailers.