Ripple CTO doesn’t consider XRP a security, compares it to a work of art
David Schwartz compared XRP to art
Ripple’s Chief Technology Officer, David Schwartz, has weighed in on the latest development in the legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). The SEC, which has been locked in a prolonged legal dispute with Ripple over the classification of its XRP token as a security, recently announced its intention to appeal to the U.S. Supreme Court following a mixed ruling from the lower courts.
Schwartz, known for his candid commentary on legal matters impacting Ripple, took to social media to share his perspective. In a series of posts on X, Schwartz emphasized that the Supreme Court's involvement could either bring long-awaited clarity to the crypto industry or prolong the uncertainty. He noted that the SEC’s move to escalate the case could be a double-edged sword, with the potential to set a critical precedent for the regulation of digital assets in the United States.
David Schwartz compared XRP to art. He stated, “Art is not a security. It's not an investment contract because its investment characteristics don't come from a contract. There is no manager who is contractually obligated to protect your investment interests.”
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A potential turning point for crypto regulation
The SEC’s decision to appeal comes after a partial victory for Ripple in a July 2024 ruling, where a federal judge concluded that XRP sales on public exchanges did not constitute securities offerings. However, the court also ruled that some institutional sales of XRP did violate securities laws. This mixed outcome left both parties partially unsatisfied, prompting the SEC to pursue a higher court’s judgment.
Schwartz highlighted that while Ripple has secured some victories, the case is far from over. He pointed out that a Supreme Court decision could either cement the legality of XRP as a non-security or lead to stricter regulatory oversight for the entire crypto sector. “This is not just about Ripple anymore; it’s about the future of crypto innovation in the U.S.,” Schwartz remarked.
Ripple’s legal team has expressed readiness to face the SEC’s challenge, maintaining that the previous rulings support their stance on XRP. The case has drawn significant attention from the broader cryptocurrency industry, with many seeing the outcome as a bellwether for future regulatory actions.
Also, Ripple CEO Brad Garlinghouse recently expressed optimism about the standoff with the SEC.
