**Ripple CTO David Schwartz Affirms Company’s Independence in Managing XRP Holdings, Reiterates XRP is Not a Security**
David Schwartz, the Chief Technology Officer of Ripple, has recently clarified that the company is not required to hold its substantial reserves of XRP. This statement comes amid ongoing discussions about Ripple’s responsibilities in distributing and managing XRP, as well as its obligations to token holders. Schwartz emphasized that XRP is not classified as a security, as Ripple does not owe any “utility” or other obligations to holders. Essentially, they are free to sell their XRP holdings without any repercussions for retail investors, a point echoed by Bitcoin advocate and XRP critic Pierre Rochard.
Rochard argued that Ripple is under no obligation to safeguard the interests of XRP holders, reinforcing the notion that the company can liquidate its XRP without affecting retail investors. Schwartz agreed, noting that, like any business, Ripple operates primarily in its own best interests. He compared the situation to owning artwork from an emerging artist; while investors may hope for an increase in value, the artist is not bound to create additional value for them. Similarly, Schwartz stated that Ripple should not be expected to act against its business interests solely to benefit XRP holders.
He further explained that Ripple’s choice not to hold onto its XRP reserves aligns with standard business practices. The company possesses more XRP than it could realistically sell in the short term, alleviating concerns about a sudden market crash due to large sell-offs. Schwartz highlighted that, with nearly 14 years of experience, Ripple is not obligated to prioritize the financial outcomes of XRP holders.
Additionally, he addressed the misconception that Ripple’s position in the crypto industry resembles a monopoly, where the company’s success would automatically translate to success for all XRP holders. Schwartz likened this belief to the assumption that Google would be the sole dominant force in the internet space. This perspective aligns with Ripple’s broader stance as it continues to navigate its legal battle with the U.S. Securities and Exchange Commission (SEC), which asserts that Ripple has a duty to protect the financial interests of XRP holders.
Schwartz’s recent remarks reflect Ripple’s ongoing defense against the SEC’s claims, which question whether Ripple’s XRP holdings should be treated as securities. The SEC’s lawsuit, filed in December 2020, centers on this critical issue.
