Ripple CTO Challenges SEC Narrative on XRP Legal History

The debate follows remarks from former SEC attorney Marc Fagel, who suggested the landmark case primarily concerned whether Ripple conducted unregistered securities offerings. Schwartz dismissed this interpretation as a revisionist account, pointing to the regulator’s December 2020 complaint, which explicitly labeled the digital asset a "digital asset security." According to Schwartz, the agency’s public messaging and formal filings consistently targeted the nature of the token rather than just the mechanics of the transactions.

Legal proceedings culminated in a July 2023 ruling by Judge Analisa Torres, who drew a sharp line between the XRP token and the contracts used to sell it. The court determined that XRP, in isolation, did not satisfy the Howey test, though it upheld that $728.9 million in direct institutional sales constituted unregistered investment contracts. While the SEC and Ripple eventually dismissed appeals in August 2025, leaving a $125.04 million penalty in place, the disagreement over the case’s central premise remains. For the company, the court’s rejection of the SEC’s broader classification of the token was a critical victory that remains a point of contention in ongoing interpretations of the litigation.