In the ongoing legal battle between Ripple and the Securities and Exchange Commission (SEC), XRP lawyer Bill Morgan stated that a settlement “seems unlikely” at this time.
XRP Lawyer: “Kraken's Use of the Decision in the Case Between Ripple and the SEC in Its Own Case Resets the Possibility of Reconciliation Between the Two”
Morgan's statement came in light of the latest developments regarding the cryptocurrency exchange Kraken. Kraken cited and summarized a key part of the Ripple case, arguing that securities require a certain relationship between an issuer and a buyer. However, the SEC argued that there was no such relationship between the issuers of tokens that the SEC labeled 'cryptoasset securities', such as ALGO, ADA and MATIC, sold on the Kraken exchange, and Kraken's customers.
According to Morgan, Kraken's main exchange platform operates on a blind bid/ask basis, similar to XRP's programmed sales, which Judge Torres found was not an investment contract. In fact, some of Ripple's scheduled sales took place on the Kraken exchange.
According to Morgan, the summary of the SEC and Ripple case claims that there is no connection between the issuing company and the buyer.
Kraken applies this reasoning to 11 issuers of the tokens in this case, which the SEC claims are crypto asset securities, the XRP lawyer explained. This could pose a significant problem for the SEC, as it would pose a major obstacle to resolving the SEC and Ripple case if Judge Torres' summary judgment decision stands and is not successfully appealed.
According to Morgan, Kraken's use of Judge Torres' finding regarding programmatic sales to dismiss its own case shows why the SEC would have a strong motivation to appeal Judge Torres' decision. For this reason, it does not seem possible to reach a compromise in the SEC and Ripple case at the moment.
*This is not investment advice.