XRP’s Not-a-Security Ruling Turns 3 as Fagel-Schwartz Clash Reopens Legal Overhang
Three years after Judge Torres split the Ripple ruling, a former SEC official and Ripple's CTO Emeritus disagree on what the SEC actually argued.
Three years to the day after a federal court ruled that XRP itself is not a security, the legal debate underpinning that decision has flared up again — this time between a former SEC official and one of Ripple’s own architects. The exchange, playing out publicly on July 14, 2026, centers on a question that never fully died with the case’s 2025 settlement: what exactly did the SEC argue about XRP, and does the “not a security” ruling actually settle it?
The anniversary that reignited the fight
The trigger was the third anniversary of Judge Analisa Torres’s July 13, 2023 decision, which found that XRP, standing alone, is not a security, and that Ripple’s programmatic exchange sales and certain other distributions did not violate federal securities law. The same ruling found that Ripple’s institutional sales did constitute unregistered securities offerings. Both sides appealed to the Second Circuit before withdrawing those appeals last year following a change in SEC leadership, closing the multi-year case.
Ripple Chief Legal Officer Stuart Alderoty marked the date publicly, calling it “Happy XRP Is Not a Security Day,” according to The Crypto Basic. The celebratory tone, however, gave way to a sharper legal argument once Marc Fagel — a veteran securities litigator and former SEC enforcement official — weighed in after an XRP community member using the handle @XRPMythBurster criticized the case’s lasting drag on XRP’s price.
Schwartz: “a bizarre attempt to rewrite history”
Ripple CTO Emeritus David Schwartz rejected that framing outright. He said conceding that XRP is not “per se” a security as mere code is not the same as saying its status depends solely on Ripple’s direct sales practices. Schwartz argued there was only one Howey analysis applied across the board — including to blind, anonymous exchange transactions — and that the SEC’s own motion for summary judgment shows the agency pursued a theory broader than “sales method” alone.
According to Schwartz, the SEC’s position was that XRP buyers reasonably expected profits from Ripple’s efforts regardless of the specific channel — institutional deal, programmatic sale, or public exchange trade — which he said the agency never confined to institutional buyers alone. He characterized Fagel’s version of events as conflating two distinct legal concepts and effectively altering the SEC’s original argument.
Why the semantics still matter for XRP
The dispute is more than academic point-scoring. How the ruling’s scope is remembered — narrow sales-conduct violation versus a broader test the SEC applied to all XRP transactions — shapes the precedent other issuers and regulators will cite in future token cases. With both sides having withdrawn their appeals last year, no appellate court will resolve the ambiguity, leaving Fagel’s and Schwartz’s competing readings as the closest thing to a live record of what the case actually decided.
For traders, the resurfacing debate is a reminder that the “XRP is not a security” narrative, while broadly correct for retail exchange trading, still carries an institutional-sales carve-out that courts settled but litigators haven’t stopped arguing over.
Read more: XRP Whale Prints Collapse 97% to Just 2 as $1.08 Support Gets Tested
Sources
- finbold.com — Ripple v. SEC battle reignites over XRP security claims
- thecryptobasic.com — Ripple CTO Emeritus Accuses Former SEC Official of “Rewriting History” Over XRP Lawsuit
Fagel: the case was about conduct, not the token
Fagel argued the SEC never claimed XRP was inherently a security, only that Ripple sold it as one. He acknowledged the agency’s legal theories “evolved over time” under then-chairman Gary Gensler, but maintained the case ultimately turned on Ripple’s sales conduct. He also questioned Ripple’s own courtroom position — that secondary XRP holders neither knew nor cared about the company’s distribution methods — asking pointedly whether that amounted to Ripple misleading the court, per Finbold.
Schwartz: “a bizarre attempt to rewrite history”
Ripple CTO Emeritus David Schwartz rejected that framing outright. He said conceding that XRP is not “per se” a security as mere code is not the same as saying its status depends solely on Ripple’s direct sales practices. Schwartz argued there was only one Howey analysis applied across the board — including to blind, anonymous exchange transactions — and that the SEC’s own motion for summary judgment shows the agency pursued a theory broader than “sales method” alone.
According to Schwartz, the SEC’s position was that XRP buyers reasonably expected profits from Ripple’s efforts regardless of the specific channel — institutional deal, programmatic sale, or public exchange trade — which he said the agency never confined to institutional buyers alone. He characterized Fagel’s version of events as conflating two distinct legal concepts and effectively altering the SEC’s original argument.
Why the semantics still matter for XRP
The dispute is more than academic point-scoring. How the ruling’s scope is remembered — narrow sales-conduct violation versus a broader test the SEC applied to all XRP transactions — shapes the precedent other issuers and regulators will cite in future token cases. With both sides having withdrawn their appeals last year, no appellate court will resolve the ambiguity, leaving Fagel’s and Schwartz’s competing readings as the closest thing to a live record of what the case actually decided.
For traders, the resurfacing debate is a reminder that the “XRP is not a security” narrative, while broadly correct for retail exchange trading, still carries an institutional-sales carve-out that courts settled but litigators haven’t stopped arguing over.
Read more: XRP Whale Prints Collapse 97% to Just 2 as $1.08 Support Gets Tested