Bill Morgan Calls Out Coinbase’s “Inconsistent” XRP Trading Halt


Coinbase’s position on the secondary sales of XRP compared with other digital assets the SEC alleges to be securities is inconsistent, according to the digital assets enthusiast Bill Morgan. Morgan highlighted his opinion in a tweet concerning a recent interview between John E. Deaton, founder of, and Paul Grewal, the Chief Legal Officer (CLO) at Coinbase.

A Conversation with Paul Grewal

— CryptoLaw (@CryptoLawUS) May 9, 2023

During the interview, Grewal answered questions on various issues surrounding Coinbase and its management of the regulatory demands of the Securities and Exchange Commission (SEC), including its approach to listing digital assets. Deaton also asked about Coinbase’s treatment of Ripple’s XRP compared with other digital assets with similar descriptions.

Notably, Grewal responded to Deaton’s XRP questions from a general perspective, detailing how Coinbase has worked to comply with the SEC’s regulatory requirements. However, he noted that Coinbase only paused the trading of XRP on its platform while monitoring how Ripple’s case with the SEC develops.

However, Morgan thinks Grewal did not provide enough details about the Coinbase-XRP issue in his response. According to him, Grewal avoided the issue.

He said, “I think Paul Grewal avoided the issue. I completely support Coinbase against the SEC, but that is another issue. We now know from Ripple’s quarterly market reports that it only sold XRP to ODL customers since before Coinbase halted trading of XRP in January 2021.”

Based on the information on how Coinbase sold XRP, Morgan noted that any trading on Coinbase’s exchange that does not involve Ripple sales to ODL customers must be the secondary market sales that Coinbase states in its Wells response do not satisfy any prong of the Howey test.

Hence, Morgan thinks the Coinbase CLO did not explain why the crypto exchange halted only XRP trading, despite the SEC’s allegation that other listed digital assets are securities.