What to know:
- David Schwartz argued that the SEC repeatedly described XRP itself as a security, not just Ripple’s XRP sales, during the lawsuit.
- Schwartz and former SEC attorney Marc Fagel disagreed over how the regulator framed its legal arguments and how the court interpreted them.
- Judge Analisa Torres ruled that XRP itself is not a security while distinguishing between Ripple’s institutional sales and its programmatic exchange sales.
Ripple Chief Technology Officer Emeritus David Schwartz has challenged claims that the U.S. Securities and Exchange Commission only targeted Ripple’s XRP sales during its lawsuit. According to Schwartz, the regulator repeatedly described XRP itself as a security before the courts rejected that position. His remarks have revived debate over one of the case’s most disputed legal issues.
Schwartz made the comments on X while responding to former SEC attorney Marc Fagel. Fagel argued that the agency’s lawsuit focused on Ripple’s sale of XRP rather than the digital asset itself. He said the SEC only needed to prove that Ripple sold XRP through unregistered securities transactions to establish a violation of Section 5 of the Securities Act.
According to Fagel, questions about whether XRP itself qualified as a security would have become more relevant in lawsuits against cryptocurrency exchanges. Therefore, he maintained that the Ripple case centered on the company’s conduct instead of the token’s legal status.
However, Schwartz rejected that interpretation. He argued that it overlooked both the SEC’s public messaging and its legal filings. Moreover, he said the regulator advanced a much broader argument throughout the litigation.
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Schwartz Points to SEC Complaint and Court Ruling
According to Schwartz, the SEC repeatedly referred to XRP itself as a security in its complaint and official press releases. He argued that those statements formed a central part of the regulator’s case rather than serving as isolated references.
Responding to Fagel, Schwartz said the former SEC attorney was describing a legal theory that differed from the one the agency actually pursued. He added that the SEC’s filings, courtroom arguments, and public communications consistently portrayed XRP as a security instead of limiting the allegations to Ripple’s sales.
Furthermore, Schwartz argued that the court rejected those broader claims. He said many people recognized that outcome as one of Ripple’s most significant courtroom victories because it narrowed the SEC’s position.
This is a bizarre attempt to rewrite history. Among other obvious contradictions between this and the facts, how is this consistent with arguing that Ripple’s sales of XRP on exchanges were offerings of securities contracts? The SEC absolutely argued that holders of XRP…
— David ‘JoelKatz’ Schwartz (@JoelKatz) July 13, 2026
Fagel acknowledged that the SEC’s messaging lacked nuance and appeared to evolve during the litigation. Nevertheless, he maintained that the legal dispute ultimately turned on whether Ripple sold XRP through transactions that qualified as securities offerings.
Schwartz disagreed with that conclusion, arguing that describing the case only through Ripple’s sales ignores the arguments the SEC presented before the court. Â He also argued that doing so rewrites the history of the lawsuit and minimizes the importance of the court’s findings.
The exchange revisits one of the defining legal disputes from the SEC’s case against Ripple. The regulator filed the lawsuit in December 2020, alleging that Ripple raised funds through unregistered securities offerings involving XRP.
Judge Analisa Torres later delivered a mixed ruling that reshaped the legal landscape for digital assets. The court found that Ripple’s institutional XRP sales violated federal securities laws. However, it also ruled that the company’s programmatic sales on public exchanges did not constitute securities transactions.
Additionally, the court determined that XRP itself is not a security. Judge Torres explained that retail buyers on secondary markets could not know whether they were purchasing tokens directly from Ripple. Consequently, those transactions did not satisfy the expectations required under the Howey Test.
The ruling became one of the cryptocurrency industry’s most significant legal decisions because it distinguished the digital asset from the manner in which it was sold.
Conclusion
Schwartz’s latest comments underscore Ripple’s position that the SEC attempted to characterize XRP itself as a security before the courts rejected that approach. Meanwhile, the discussion highlights that the lawsuit’s legal legacy extends beyond Ripple’s sales practices and remains a key reference point in debates over cryptocurrency regulation.
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