The status of XRP has raised eyebrows for a while, especially after claims of selling illegal securities. On Wednesday, the court will shed light on many important matters.
This week will be an important one for Ripple.
According to reports, a court hearing concerning XRP’s status will take place at the California district court. Judge Phyllis J. Hamilton will either approve or deny Ripple’s final motion to toss the lawsuit.
What’s XRP’s crime?
The lead plaintiff in the case, Bradley Sostack, took Ripple to court over carrying out a never-ending ICO between 2013 to 2015. The plaintiff also accused it of selling unregistered securities to its investors.
Besides, other claims suggest that Ripple broke a number of laws in the state of California. For instance, to improve demand it allegedly didn’t clarify the difference between Ripple’s enterprise solutions and XRP. Also, the company reportedly paid exchanges to list Ripple XRP, limiting the supply of XRP and thus driving demand.
According to the statute of repose, Sostack had to present his court case no later than 2016. However, Ripple turned to a last-minute resort and filed a motion. In it, the company insists that the XRP cryptocurrency can’t be considered a security per se. It also claimed that the case was brought to the court way too late.
That said, recently evidence came up supporting claims that Ripple served as the major entity behind the development of XRP. The data also indicated that the company and its members sell the cryptocurrency for the purpose of enriching themselves. However, CTO of the company, David Schwartz tried debunking most of those claims.
Brad Garlinghouse doesn’t think it’s a security
Sequel to the controversy, CEO of Ripple Labs, Brad Garlinghouse gave his comments. He explained why he thinks the token isn’t a security.
Firstly, Garlinghouse pointed out that XRP isn’t dependent on the company. This means that token holders don’t depend on Ripple for speculative profiteering.
Quoting him: “I think it’s very clear that XRP isn’t a security. It exists independently of the company, Ripple. And peradventure Ripple, the company shut down tomorrow the XRP ecosystem continues to exist. It’s an independent open source technology.”
Besides, Garlinghouse mentioned that XRP holders don’t get ownership rights in Ripple (a privately owned company). This means the tokens don’t equate to tokenized equity shares within the company.
Additionally, he pointed out that XRP differs from an investment vehicle. But, it’s a digital asset that institutions purchase to complete international money transfers. Garlinghouse explained that XRP brings a lot of utility. Thus, it differs from security.
To remind, Ripple and SCB announced the release of the SCB Easy App. The partnership aims at bringing digitalization to Thailand.