{"id":75500,"date":"2026-07-16T15:19:29","date_gmt":"2026-07-16T15:19:29","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/ripples-schwartz-says-sec-treated-xrp-like-a-security-despite-calling-the-crypto-just-code\/"},"modified":"2026-07-16T15:19:29","modified_gmt":"2026-07-16T15:19:29","slug":"ripples-schwartz-says-sec-treated-xrp-like-a-security-despite-calling-the-crypto-just-code","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/ripples-schwartz-says-sec-treated-xrp-like-a-security-despite-calling-the-crypto-just-code\/","title":{"rendered":"Ripple&#8217;s Schwartz Says SEC Treated XRP Like a Security Despite Calling the Crypto &#8216;Just Code&#8217;"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">David Schwartz says the SEC treated XRP as a security by arguing holders expected profits from Ripple\u2019s efforts.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Former SEC regional director Marc Fagel says the case targeted Ripple\u2019s XRP sales, not the crypto token itself.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Their dispute centers on whether calling XRP \u201cjust code\u201d meaningfully limited the SEC\u2019s legal theory.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Schwartz Says SEC\u2019s XRP Theory Extended Beyond Ripple\u2019s Conduct<\/h2>\n<p>The disagreement between Ripple CTO Emeritus David Schwartz and former SEC official Marc Fagel unfolded on X on July 13, centering on whether the SEC challenged only Ripple\u2019s sales practices or effectively treated <span>XRP<\/span> itself as a security.<\/p>\n<p>According to the former SEC official, the case \u201cwasn\u2019t against <span>XRP<\/span>, just Ripple.\u201d He <a href=\"https:\/\/x.com\/Marc_Fagel\/status\/2076747897790689662\" target=\"_blank\" rel=\"noopener noreferrer\">said<\/a> the SEC recognized that <span>XRP<\/span>, as code, was not inherently <a href=\"https:\/\/news.bitcoin.com\/us-judge-rules-xrp-not-necessarily-a-security-on-its-face-sending-xrp-supporters-into-celebration\/\">a security<\/a>. Under that interpretation, the violation arose from Ripple selling <span>XRP<\/span> under circumstances that created investment contracts.<\/p>\n<p><\/p>\n<p>Schwartz <a href=\"https:\/\/x.com\/JoelKatz\/status\/2076765852976951473\" target=\"_blank\" rel=\"noopener noreferrer\">rejected<\/a> that characterization, calling it \u201ca bizarre attempt to rewrite history.\u201d While acknowledging the SEC conceded <span>XRP<\/span> was not a security per se, he argued the agency\u2019s broader legal theory still treated <span>XRP<\/span> as a security by claiming holders expected profits from Ripple\u2019s efforts.<\/p>\n<p>He also stated the SEC\u2019s filings, public statements and the court\u2019s ruling contradicted Fagel\u2019s interpretation and showed that the agency\u2019s argument extended beyond Ripple\u2019s sales conduct.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-831553 aligncenter\" src=\"https:\/\/static.news.bitcoin.com\/wp-content\/uploads\/2026\/07\/schwartz-x-post-1.jpg\" alt=\"\" width=\"733\" height=\"194\" srcset=\"https:\/\/static.news.bitcoin.com\/wp-content\/uploads\/2026\/07\/schwartz-x-post-1-300x79.jpg 300w, https:\/\/static.news.bitcoin.com\/wp-content\/uploads\/2026\/07\/schwartz-x-post-1.jpg 733w\" sizes=\"auto, (max-width: 733px) 100vw, 733px\"\/><\/p>\n<h2>Former SEC Official Defends Agency\u2019s Interpretation<\/h2>\n<p>Marc Fagel, a retired attorney, spent more than 15 years at the SEC and served as Regional Director of its San Francisco office from 2008 to 2013. Across his 28-year legal career, he specialized in securities enforcement and oversaw investigations involving public company disclosures, insider trading and investment advisers.<\/p>\n<p>That background lends weight to his interpretation. He claimed the agency\u2019s \u201conly legal argument was that Ripple sold it as a security.\u201d He also pointed to the SEC\u2019s partial victory, suggesting the criticism should concern Ripple\u2019s conduct rather than an attempt to classify <span>XRP<\/span> itself as a security.<\/p>\n<p>The Ripple CTO Emeritus rejected that distinction, arguing that describing <span>XRP<\/span> as \u201cjust code\u201d did not concede that only Ripple\u2019s sales methods could create a securities violation. He wrote:<\/p>\n<blockquote>\n<p>\u201cThe SEC is absolutely *not* conceding here that the only issue is whether Ripple \u2018sold it as a security\u2019 as you claim.\u201d<\/p>\n<\/blockquote>\n<p>\u201cIt is merely conceding that <span>XRP<\/span> is not \u2018per se\u2019 a security, that is, would necessarily be a security regardless of any facts and circumstances surrounding it other than its inherent nature as a digital token,\u201d Schwartz clarified.<\/p>\n<h2>Exchange Sales Complicate Fagel\u2019s Interpretation<\/h2>\n<p>The rebuttal centers partly on Ripple\u2019s programmatic <span>XRP<\/span> sales through <span>cryptocurrency<\/span> exchanges. The SEC alleged those transactions were securities offerings even though buyers generally did not know whether Ripple or another market participant had sold them the tokens.<\/p>\n<p>According to Schwartz, this cannot be explained simply by saying Ripple \u201csold it as a security.\u201d Buyers in blind exchange transactions were not necessarily exposed to Ripple\u2019s representations or aware of the seller\u2019s identity.<\/p>\n<p>Instead, he said, the SEC used a broader Howey theory under which <span>XRP<\/span> holders joined a common enterprise and reasonably expected profits from Ripple\u2019s efforts. That argument connected buyers to Ripple without requiring a direct contract or an identifiable company sale. Schwartz stressed:<\/p>\n<blockquote>\n<p>\u201cThe SEC absolutely argued that holders of <span>XRP<\/span> reasonably expected profits from Ripple\u2019s efforts and were in effect partners in a shared venture.\u201d<\/p>\n<\/blockquote>\n<p>He maintained that only such a broad theory could encompass exchange sales.<\/p>\n<h2>\u2018Just Code\u2019 Did Not Settle the SEC\u2019s Broader XRP Theory<\/h2>\n<p>For Schwartz, the phrase \u201cjust code\u201d carries less legal significance than Fagel suggests. The concession established only that <span>XRP<\/span> was not automatically a security because of its technical characteristics.<\/p>\n<p>It did not establish that the SEC\u2019s securities theory depended solely on how Ripple sold <span>XRP<\/span>. Instead, he said, the agency linked its investment-contract analysis to <span>XRP<\/span> holders, Ripple\u2019s activities and expectations of profit.<\/p>\n<p>He further argued that the SEC resisted separate analyses for different <a href=\"https:\/\/www.binance.com\/en\/price\/xrp\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">XRP<\/a> transactions, relying instead on one Howey theory for institutional sales, exchange sales and other distributions.<\/p>\n<p>To support that interpretation, Schwartz cited the language used in the SEC\u2019s complaint and public statements, which referred to <a href=\"https:\/\/www.binance.com\/en\/price\/xrp\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">XRP<\/a> itself as the security and described Ripple executives Brad Garlinghouse and Chris Larsen as \u201csecurity holders.\u201d He shared:<\/p>\n<blockquote>\n<p>\u201cThe complaint itself frequently refers to <a href=\"https:\/\/www.binance.com\/en\/price\/xrp\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">XRP<\/a> itself as the security. The SEC\u2019s press release complained Ripple \u2018sold <a href=\"https:\/\/www.binance.com\/en\/price\/xrp\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">XRP<\/a>\u2019 without a registration statement. It described Chris and Brad as \u2018security holders\u2019.\u201d<\/p>\n<\/blockquote>\n<p>The court ultimately <a href=\"https:\/\/news.bitcoin.com\/ripples-chief-legal-officer-breaks-down-ruling-in-sec-lawsuit-says-as-a-matter-of-law-xrp-is-not-a-security\/\">made distinctions<\/a> the SEC had resisted, finding that certain institutional sales were investment contracts while Ripple\u2019s programmatic exchange sales were not. Schwartz views that partial rejection as evidence that the court narrowed the agency\u2019s broader theory.<\/p>\n<p>That disagreement remains central to the case\u2019s legacy. Future courts applying the reasoning in the Ripple ruling will help determine whether the decision is understood primarily as a transaction-specific analysis or as a broader rejection of the SEC\u2019s attempt to link exchange buyers to Ripple\u2019s continuing efforts.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/ripples-schwartz-says-sec-treated-xrp-like-a-security-despite-calling-the-crypto-just-code\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways David Schwartz says the SEC treated XRP as a security by arguing holders expected profits from Ripple\u2019s efforts. Former SEC regional director Marc Fagel says the case targeted Ripple\u2019s XRP sales, not the crypto token itself. Their dispute centers on whether calling XRP \u201cjust code\u201d meaningfully [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":75501,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/75500"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=75500"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/75500\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/75501"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=75500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=75500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=75500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}