TechFlow News — Today, the U.S. Securities and Exchange Commission (SEC) officially filed a lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen, alleging that the defendants raised over $1.3 billion through unregistered securities offerings.
In response, Ripple CEO Brad Garlinghouse issued an open letter stating that the SEC is entirely wrong both factually and legally, asserting that XRP is not a security but rather a currency akin to BTC and ETH. He provided three key reasons:
1. XRP is not an "investment contract." Holders of XRP do not share in Ripple's profits, receive dividends, or possess voting rights or any other corporate privileges. Buyers receive nothing beyond the asset itself when purchasing XRP. In fact, the vast majority of XRP holders have no connection or relationship with Ripple.
2. Ripple has shareholders. If you wish to invest in Ripple, you do not buy XRP—you purchase shares of Ripple itself.
3. Unlike securities, XRP’s market value is not tied to Ripple’s activities. Instead, XRP’s price correlates with the movements of other virtual currencies.
