- Ripple’s CEO states 3 major reasons why XRP is not a security
- XRP is autonomous
- Holding XRP does not equate to shares in Ripple
- Service rendering does not fall in the category of security
Ripple has been in a recurrent issue on the Status of XRP if it was a security or not. Ripple’s Lab CEO Brad Garlinghouse has come out to clear the air in what he believes the coin is not a security.
XRP is Autonomous
While speaking on CNBN, Garlinghouse defending Ripple’s honor strongly, stating that Ripple has nothing to answer for. The security issue came up sometime in August 2019, when a plaintiff Bradley Sostack filed a complaint that claims the company sold XRP, unregistered security, to retailers.
XRP (XRP) Price Today – XRP / USD
Referencing Sostack in the interview, Garlinghouse dismissed any view of a valid claim against the company. Garlinghouse went as far as stating that whatever the case may be, any single court ruling would have no influence on if XRP is classified as a security or not. He went thus:
“it’s pretty outrageous. Here’s somebody who 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.”
Garlinghouse went on to validate his statement by stating that XRP is totally autonomous. Hence, token holders are not reliant on Ripple, Garlinghouse added:
“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.”
Holding XRP does not equate to shares in Ripple
Also, Garlinghouse claims that XRP holders have no share in Ripple, which is a private company. He said: “owning XRP doesn’t give you ownership of Ripple equity.”
Nonetheless, having said that, there is still uncertainty if that is a valid point. Private firm analyst, Anthony Balladon sees some resemblance in how token holders see XRP as shares in a company. Balladon commented:
“Looking at XRP as a vehicle for speculation, as some cryptocurrencies have become, there is an expectation 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.”
Service rendering does not fall in the category of security
Giving his third reason, Garlinghouse states that rendering Utility is not security. On several occasions, Ripple has explained that XRP is not an investment platform, instead, it is a digital asset that firms can buy to complete universal money transfers. According to Garlinghouse, this does not fall into the classification of security. January 15 has been scheduled for both parties to meet in the U.S District Court to deliberate on the issue.