Ripple and its digital heritage, XRP have been in the spotlight for the whole year.
Investors love money or hate it, and more voices in the cryptosphere and outside it have accused XRP of being a security. The SEC itself has not yet decided how to classify the digital resource.
Some time ago the SEC stated clearly that they do not consider the Bitcoin and Ethereum titles, so they left these two coins alone in terms of SEC regulation.
Ripple's CEO, Brad Garlinghouse, has defended XRP on several occasions by explaining each time why the digital asset is not a security.
Ripple and XRP are separate entities even if they have been continually confused by cryptographic speculators and the media.
The fact that Ripple owns 60% of the XRP token supply has not been very helpful.
In any case, here are the three main reasons highlighted by Garlinghouse to show that XRP is not simply a security.
For these three reasons, a former member of the SEC adds the fourth element to justify the fact that XRP is not a security.
XRP can work without Ripple
First of all, Garlinghouse said that if Ripple were to close the company tomorrow, the XRP register will continue its operations. Its open source and decentralized technology exists independently of Ripple.
The purchase of XRP does not give you ownership of Ripple
Secondly, people who buy XRP do not think about buying Ripple shares.
"There is a company called Ripple, we are a private company, we have investors … but buying XRP does not give you ownership of Ripple, it does not give you access to dividends or profits that come from Ripple," he said.
The XRP solves the problems
Finally, XRP is solving problems and the titles have no use.
XRP passes the Howey test
The fourth reason why Ripple's XRP is not a security is given by a former SEC member.
Michael Didiuk, a former member of the SEC, said that XRP is a currency and not a security because it passes the Howey test.
"I do not think XRP is a security, I think the XRP is a currency. […] Howey test … It's a 4-factor test: investing money in a joint venture with the expectation of profits based on the efforts of others, "he said some time ago.