Brad Garlinghouse: Three reasons why XRP is not a security

While Bitcoin and Ethereum have been identified as not securities, XRP is the opposite. Referring to this issue, Ripple Labs CEO Brad Garlinghouse has raised the reasons why he thinks XRP is not a security. Although it may not sound very objective, it is one of the points we need to consider.


XRP not security, entirely independent of the company

Brad Garlinghouse has always defended Ripple’s integrity. In August 2019, the main plaintiff in the lawsuit against Ripple, Bradley Sostack, filed a complaint alleging the company sold XRP, unregistered security, to retail investors.

Garlinghouse, therefore, rejected Sostack’s argument entirely. Furthermore, he asserted that any court ruling would not have an impact on whether XRP was classified as a security.

He stated:

“What a strange story. Someone had been hacking XRP for two weeks, and he made some statements … Whether or not XRP is a security or not isn’t going to be dictated by one lawsuit.”


Brad Garlinghouse, Ripple CEO

Garlinghouse continues to justify this by saying XRP is entirely independent of the company. Therefore, XRP hodlers do not depend on Ripple or any other party for speculative profit.

He said:

“I think it’s obvious that XRP is not a security. It exists independently of Ripple. If Ripple closes tomorrow, the XRP ecosystem will continue to exist. It’s a technology.” independent open source.”

Ownership of XRP is not equivalent to a purchase of shares in Ripple

Also, Garlinghouse stated that the XRP hodler has no ownership in Ripple, which is a private company. In other words, XRP does not equate to tokenized equity shares within the company.

He said:

“Owning XRP does not give you ownership of Ripple equity.”

However, private equity analyst, Anthony Balladon, sees some similarities in how token holders view XRP about shares in a company.

Balladon said:

“A person looks at XRP as a means of speculation, because some cryptocurrencies have become, have an expectation of buying XRP, see prices rise, and then sell to make a profit. This sounds like buying a share of the company. ”

Securities don’t have gadgets, but XRP does

Garlinghouse gives a third and final reason to prove XRP is not a security. And that relates to the utility of XRP.

Ripple has clearly stated that XRP is not an investment vehicle. Instead, XRP is a digital asset that organizations can buy to complete international money transfers.

According to Garlinghouse, this does not match the characteristics of a security. Therefore, XRP buyers only do so based on the expectation of the increased network effect of the XRP ecosystem. A proposal that is entirely different from traditional investment.

He said:

“The XRP software has a lot of utilities; for me, it’s very different from the stock form, and eventually, we’ll find that conclusion.”

All are the same; these arguments and more will be discussed in the US District Court. The two sides will meet on January 15.

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