Back in September 2019, if you’ll remember, Ripple said that XRP is not a security but an investment contract, in a motion filing to dismiss a lawsuit.
Ripple CEO said, “Purchasing XRP is not an ‘investment’ in Ripple; there is no common enterprise between Ripple and XRP purchasers; there was no promise that Ripple would help generate profits for XRP holders, and the XRP Ledger is decentralized.”
Furthermore, the company stated that XRP is a currency. Based on one footnote from the 37-page filling, it directly addresses whether the XRP is an unregistered security.
In May 2018, XRP investors filed a case against Ripple along with its executives. These group of investors claim that the firm violated the federal and state securities laws.
Yesterday, Digital Assets Daily tweeted what Brad Garlinghouse said. The Twitter post reads, “I think it’s very clear that XRP is not a security….”
In August 2019, the group of XRP investors filed an amended complaint that argues that XRP tokens were unregistered securities under the guidance of Securities and Exchange Commission.
Meanwhile, Garlinhouse defended the integrity of Ripple, where he claims that the company has nothing to answer for.
Following the complaint filed by the XRP investors, Garlinghouse stated from an interview that, “it’s pretty outrageous. Here’s somebody whose held XRP for two weeks time, and he’s making some claims… Whether or not XRP is a security or not isn’t going to be dictated by one lawsuit”
From that interview, Garlinghouse is referencing to Bradley Sostack, the lead plaintiff in the lawsuit against Ripple.
Garlinghouse further stated that, “I think it’s very clear that XRP is not a security. It exists independently of the company, Ripple. If Ripple, the company shut down tomorrow the XRP ecosystem would continue to exist. It’s an independent open source technology.”
More Reasons Why XRP is Not A Security
According to Garlinghouse, XRP holders have no ownership rights in Ripple, especially it is a privately owned firm. In short, XRP do not equate to any of the company’s tokenized equity shares.
Anthony Baldon, a private equity analyst, said that “Looking at XRP as a vehicle for speculation, as some cryptocurrencies have become, there is an exception of buying XRP, seeing a rise in the price and then selling for profit. This sounds a lot like buying a share of a company’s stock. This statement is based on what he sees of how holders view XRP related to company shares.”
Additionally, Garlinghouse consider utility not one of the characteristics of security. He said that, “XRP has a lot of utility, to me that’s very different to what a security looks like, and ultimately we’ll find that conclusion.
On January 15th, the two parties will meet in the US District Court to deliberate their arguments.
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