"No judge in the world that I am aware has found that a crypto itself is a security but can morph into a commodity. A judge however did find that XRP itself is not a security. The SEC knows about that finding and does not challenge it in the Appeal. Therefore, your speculation that what is being discussed now is the comparison between the XRP and ETH and whether XRP can trade as a commodity because it 'morphed' from a security to a commodity is highly unlikely to be correct."
Morgan also highlighted inconsistencies in the SEC's legal approach:
"It is also completely inconsistent with the SEC's dropping of the other lawsuits which inevitably must be premised on the grounds cryptos are not securities and not traded in secondary markets as securities."
Since President Trump appointed Commissioner Mark Uyeda as Acting SEC Chair, and with the establishment of the Crypto Task Force, the agency has ended enforcement actions. Significantly, the SEC dismissed its lawsuit against Coinbase (COIN). The SEC had charged Coinbase for operating as an unregistered securities exchange, broker, and clearing agency.
The dismissal raises questions about whether the SEC still considers the Howey test applicable to secondary market blind bid/ask transactions. Under this scenario, the SEC would have to take a similar view on the Programmatic Sales of XRP ruling, supporting an appeal withdrawal.
On March 12, Fox Business Journalist Eleanor Terrett reported that Ripple and the SEC were negotiating Judge Analisa Torres' Final Judgment. Two key points of discussion are likely the $125 million penalty and the injunction requiring Ripple to comply with Section 5 of the Securities Act, particularly given the SEC's evolving stance on crypto regulation.
On Thursday, March 13, XRP rose 0.59% after Wednesday's 3.13% gain, closing at $2.2530. Significantly, XRP outperformed the broader market, which dropped by 2.34% to a total crypto market cap of $2.61 trillion.
Ongoing hopes for an SEC appeal withdrawal and the potential approval of XRP-spot ETFs bolstered XRP demand.