David Schwartz, also known as JoelKatz and longtime CTO of Ripple, is pushing back hard against what he calls an attempt to rewrite the history of the SEC vs. Ripple lawsuit.
In a recent post, Schwartz argued that the SEC didn’t just target specific sales — it treated XRP itself as a security across the board.
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The SEC’s Core Argument
According to Schwartz, the SEC’s complaint repeatedly referred to XRP as the security. Their press release stated that Ripple “sold XRP coins” without a registration statement. The agency also described Ripple executives Chris Larsen and Brad Garlinghouse as “security holders.”
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The key point: The SEC applied a single Howey analysis to all Ripple’s sales and offers of XRP — including blind sales on exchanges. They rejected the idea that different types of sales needed separate legal scrutiny.
Gary Gensler’s Own Words
David ‘JoelKatz’ Schwartz pointed to public statements from then-SEC Chair Gary Gensler as the clearest evidence. In speeches and comments, Gensler and the Commission framed the case around XRP itself, not just institutional or direct sales.
This broad approach was central to the SEC’s strategy. It wasn’t a narrow claim about certain buyers — it was a blanket assertion that XRP transactions by Ripple violated securities laws.
Howey Test Back In Focus
The SEC’s case heavily relied on the Howey Test, the classic legal framework used to determine whether something qualifies as an investment contract (and thus a security). Under Howey, an asset is a security if there is an investment of money in a common enterprise with a reasonable expectation of profits derived from the efforts of others.
The SEC argued that Ripple’s sales of XRP met all these prongs — treating the token itself as the security, not just the way it was sold. This single, sweeping Howey analysis was applied to Ripple’s entire distribution strategy, from institutional deals to open-market sales, which became a major point of contention throughout the litigation.
Why This Still Matters Now
The debate has resurfaced as people revisit the case outcome and ongoing discussions around crypto regulation. Schwartz’s post serves as a direct rebuttal to anyone trying to downplay the SEC’s original position or claim they were only going after specific distributions.
For XRP holders and the broader crypto community, David Schwartz’s reminder reinforces a key narrative: The SEC took an aggressive & expansive view of what constituted a security: one that went far beyond the court ruling. The fight over how the case is remembered continues.
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David Schwartz, known online as JoelKatz, is the former CTO of Ripple and one of the original architects of the XRP Ledger. He’s a key voice in the XRP community and often explains technical and legal topics.
He pushed back against people trying to rewrite history of the SEC vs Ripple lawsuit. He reminded everyone that the SEC originally treated XRP itself as a security — not just certain sales.
The SEC said Ripple sold XRP without registering it as a security. They used one single Howey Test analysis that applied to all XRP sales (including sales on exchanges), and even called Chris Larsen and Brad Garlinghouse “security holders.”
A simple legal test used to decide if something is an “investment contract” (a type of security). It checks if people invested money expecting profits from someone else’s efforts.
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