Ripple Chief Technology Officer Emeritus David Schwartz has publicly disputed claims that the US Securities and Exchange Commission’s lawsuit against the company focused exclusively on XRP sales rather than classifying the digital asset itself as a security.
Schwartz, one of the original architects of the XRP Ledger, pushed back on social media against a recurring narrative among some crypto commentators that the SEC’s legal action against Ripple was narrowly targeted at how XRP was sold rather than the status of the token itself. The distinction matters because it affects how XRP is treated under US securities law going forward.
The SEC filed its complaint against Ripple Labs in December 2020, alleging that XRP was an unregistered security offering. The case became one of the most closely watched legal battles in crypto history, with implications for how digital assets are classified and regulated in the United States.
In July 2023, a federal judge ruled that XRP was not a security when sold to retail investors on public exchanges, but that institutional sales of XRP by Ripple did constitute securities transactions. This split decision left both sides claiming partial victory and created ongoing legal uncertainty around XRP’s status.
Schwartz’s comments appear aimed at correcting what he views as a misrepresentation of the case’s scope. He emphasized that the SEC’s enforcement action did in fact allege that XRP itself was a security, even if the court ultimately distinguished between different types of sales. The distinction has practical implications for how exchanges and institutional investors approach XRP, as well as for the broader regulatory framework governing digital assets.
The legal debate around XRP’s status continues to evolve, with Ripple and the SEC still engaged in litigation over remedies and penalties. A final resolution could set important precedents for how other cryptocurrencies are classified under US securities law.
This article was adapted from U.Today. Read the original here.
