“Orange” Analogy Adds Zest to Ripple’s Appeal Against SEC

• MetaLawMan compares XRP with oranges to show the complexity of the token’s classification.
• The analogy shows that the conceptual architecture in the Howey test is inadequate for dealing with security issues.
• The comparison primarily focused on the wholesale sale of oranges, which equated with XRP’s institutional sale.

In a recent CryptoLaw interview, crypto enthusiast James Murphy, known as MetaLawMan, shed light on the SEC’s appeal in the Ripple case. His insightful comparison of oranges and XRP, in the context of the Howey Test, captured the XRP community’s attention and sparked debate about XRP’s legal classification.

XRP attorney Bill Morgan praised MetaLawMan on X for his metaphorical explanation of XRP sales. Morgan argued that the analogy demonstrates the inadequacy of the Howey Test in addressing the complexities of “security issues that arise from buying crypto and the development and operation of crypto markets.”

That video was great. I always find the analogy to the Howey oranges and orange groves intriguing. @JohnEDeaton1 did it well.

Your analogy of the wholesalers buying oranges from Howey and selling at a higher price into the markets with institutional buyers of XRP at a discount… https://t.co/w5TjkfDSSn pic.twitter.com/pxavy9lqsr

— bill morgan (@Belisarius2020)
October 10, 2024

Morgan’s post was inspired by MetaLawMan’s X thread, which highlighted the need for Ripple to appeal the SEC’s recent move. MetaLawMan’s interview with attorney Kristi Warner particularly resonated with Morgan, specifically the comparison between XRP transactions and orange sales.

The analogy involved wholesalers buying oranges from Howey at a discount and selling them for a profit, with Howey using the funds for farming operations. Crucially, the wholesalers do not share profits with the wholesale seller. MetaLawMan drew parallels with XRP sales, where Ripple sells XRP to institutions at a discount, who then resell it on the market without sharing profits with Ripple.

Read also: Ripple Case: Lawyer Sees No Settlement with SEC Despite Ruling

Here’s why I think @Ripple should file a cross-appeal. https://t.co/2nm0A2bnRt

— MetaLawMan (@MetaLawMan)
October 9, 2024

While Ripple achieved a significant victory with Judge Analisa Torres’ final judgment, the SEC has filed an appeal. Although experts predict a protracted legal battle, there is hope for a settlement within the 14-day appeal period.

MetaLawMan also outlined potential aspects of Ripple’s appeal, suggesting it will likely focus on two key issues: XRP’s legal status in secondary market sales and the lack of a disgorgement award. Judge Torres ruled that secondary XRP sales do not constitute securities transactions, contradicting the SEC’s claims. Moreover, the SEC failed to identify specific victims to justify a disgorgement order. 

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