The status of XRP in the secondary market is an important issue that worries all investors, since almost all of them own XRP by buying from exchanges and exchangers. The SEC considers all XRP, even those sold on the secondary market, to be a sale of securities. However, there is no such question in the lawsuit itself, and if the judge in the case does not consider this question on his own initiative, it will remain open.
Attorney John Deaton believes that Judge Analisa Torres will address the issue of XRP trading on the secondary market in his upcoming summary judgment.
He made the announcement yesterday, responding to a remark by Mark Fagel, former regional director of the SEC. One user noted that Fagel claims that the judge is unlikely to trade XRP on the secondary market.
Deaton disagrees with Fagel
IN answer lawyer Deaton disagreed with Fagel. However, he stressed that no one knows what Judge Torres will comment on in the upcoming decision.
“[…] As a general rule, the referee usually only decides what he/she needs to decide.” Deaton said.
He added that while Judge Torres does not need to look at secondary market sales to determine whether Ripple has sold XRP as a security, she can also rule on smaller issues outside of secondary market transactions.
3 Reasons Why Judge Torres Will Consider Selling XRP on the Secondary Market
To support his position, the pro-XRP lawyer highlighted three main reasons why he thinks the judge would consider trading XRP on the secondary market.
First, he noted that the SEC’s motion for summary judgment requires a judge to review XRP trading on the secondary market. According to Deaton, the SEC argued in its brief that the purchase of XRP was/is an investment in a common venture with other investors and Ripple.
The Commission also states that if any country accepts XRP as legal tender, such a transaction will still be an investment contract. For the SEC, XRP is a common enterprise that links all XRP investors to Ripple.
In addition, Deaton stressed that the SEC’s XRP argument is not limited to Ripple sales; it also includes sales of the crypto asset on the secondary market. According to Deaton, Judge Torres is trying his best not to discuss XRP secondary sales and the token itself.
Second, Deaton believes that the multiple amicus briefs he filed in the lawsuit on behalf of XRP holders, Coinbase, SpendTheBits, TapJets, the Blockchain Association, and the Chambers of Digital Commerce will encourage the judge to sell the coin on the secondary market.
Judge Torres may not decide on the issue of XRP trading on the secondary market, and she may remain silent on the matter despite numerous reports of amicus curiae.
Finally, Deaton contends that the judge is aware that secondary trading was discussed in the SEC v. LBRY lawsuit.
Deaton, who represented journalist Naomi Brockwell in the LBRY case, said that if the judge does not consider secondary market sales of XRP and Ripple loses in summary judgment, he will file a motion to be allowed to participate in the punitive phase of Ripple’s lawsuit.
Meanwhile, Deaton said that the fact that the judge who presided over the LBRY case allowed him to participate does not mean that Judge Torres will make a similar decision.
He noted that the SEC had no objection to his application to serve as amicus curiae in the LBRY lawsuit because they had no idea he had made the request.