Following the SEC’s appeal to the Supreme Court over Ripple’s recent court win, Ripple CTO David Schwartz tried to address a previous recurring concern. Schwartz reassured the XRP community that he’s committed to Ripple’s value and working for all stakeholders.
Amid criticism from investors, Schwartz clarified that his XRP holdings have fluctuated alongside everyone else’s.
Ripple CTO Defends XRP Amid Investor Criticism
Now, the SEC has appealed to the Supreme Court to reverse a previous decision that favored Ripple. Ripple’s XRP sales on secondary markets and individual sales by executives Brad Garlinghouse and Christian Larsen did not violate securities laws; the judge had previously found.
Context was also provided by Schwartz, who explained that an investment contract is one where one party commits to act for another.
He maintained that ‘mere reliance on the self-interest of an individual’ did not make an investment contract and likened that to purchasing art from a newish artist without hope of any future gain.
Contractually, they are different; XRP doesn’t inherently meet the Howey Test in being an investment contract, he said. Schwartz hoped the Supreme Court would take a practical approach to the law.
When an investor comes up to him and accuses him of profiting from XRP at the community’s expense, Schwartz points to the equal rise and fall of his XRP holdings. ‘He made clear that his role at Ripple is to serve the entire XRP ecosystem, and his personal XRP has experienced the same volatility as others.’ This statement aimed to calm the community down because Schwartz’s interests are aligned with those of the community.
Schwartz reiterated that he is working to achieve XRP’s success and that everything he does aims to support Ripple and all XRP holders. His remarks stated,
“Even while we are in ongoing legal disputes with the SEC, he sounds very confident about where we are going with our strategy.”
The idea was also to banish any big-picture doubts regarding whether Ripple executives focus as much on their interests as the community.
XRP Non-Security Status Aided by Low Promotion
Legal expert Bill Morgan added that the court found Ripple’s programmatic sales of XRP did not comply with the Howey Test criteria.
The court’s view on XRP being non-secured was partly a continuation of Ripple’s decision not to push XRP hard on retail investors. As a result, Morgan noted that this lack of promotion was a coup for Ripple under current securities laws.
Morgan said Ripple’s reluctance to push XRP to retail investors will likely continue because it could weaken its legal position. Ripple’s careful approach sounds prudent, given the firm’s ongoing litigation and the regulatory ramifications of each step taken.
As a strategy, Ripple is signaling that it wants to take the focus away from the smaller market and adhere to legal boundaries.
XRP Gains Spark Optimism Amid Market Rally
Despite a generally flat performance, XRP recently saw a 30.57% rise over eight days, followed by a 14.35% increase within 24 hours. This positive trend offered some optimism to XRP holders, though many remained cautious about its longevity. The upward movement coincided with broader market trends, yet Ripple’s strategy remains unclear.
Investors are eager to see if Ripple will capitalize on the current crypto market rally, especially in light of recent price gains. Ripple’s legal approach and restrained market strategy aim for long-term stability over short-term profits. As the legal landscape evolves, Ripple and its investors await further clarity from the Supreme Court on XRP’s regulatory status.
