[DigitalToday reporter Jinju Hong] Ripple Chief Technology Officer David Schwartz challenged the interpretation that the U.S. Securities and Exchange Commission questioned only Ripple's method of selling XRP during the lawsuit. He criticised it as an attempt to "rewrite history" by scaling back the SEC's original claims. He said the regulator had advanced a broader securities argument covering XRP as a whole, including tokens distributed through exchanges.

According to blockchain media outlet Decrypt on July 14 local time, the dispute resurfaced as the third anniversary of a landmark XRP ruling approached. On July 13, 2023, U.S. federal judge Analisa Torres ruled that XRP itself is not a security. She also ruled that programmatic sales on exchanges and some XRP distributions did not violate federal securities laws. However, she found sales of XRP to institutional investors amounted to unregistered securities offerings.

Ripple Chief Legal Officer Stuart Alderoty posted a message saying, "Happy XRP Non-Security Day," highlighting the significance of the ruling again on its third anniversary.

The controversy began with comments by Mark Fagel, a former SEC commissioner. He said the SEC had viewed XRP throughout the case only as simple computer code and had never argued the token itself was inherently a security. He said what the SEC challenged was the way Ripple sold XRP as an investment contract.

Schwartz rejected that reading as untrue. He called it a "strange rewriting of history" aimed at changing the SEC's original litigation theory. He said it was inaccurate to suggest XRP was treated as a security only because of a particular sales method.

Schwartz said the SEC presented a much broader legal theory during the case. He said the regulator argued that XRP investors expected profits based on Ripple's business activities and efforts, meeting the requirements of the U.S. Supreme Court's Howey test.

He said the argument was not applied only to sales to institutional investors but was also applied to XRP traded on cryptocurrency exchanges. Schwartz urged Fagel to review the SEC's motion for summary judgment, saying the document contains a far broader securities rationale than some now describe.

Schwartz also said the SEC acknowledged that a digital asset does not automatically become a security in all circumstances, but that did not mean XRP was considered a security only under a specific sales method. He said Fagel was conflating different legal concepts and interpreting the SEC's original claims in a narrowed way.

The Ripple case is regarded as one of the most important precedents in the crypto industry. While Torres ruled that XRP itself is not a security, she found that sales to institutions violated securities laws, setting out a standard that the legal character can differ depending on the transaction type.

The SEC and Ripple later appealed parts of the ruling to the U.S. Court of Appeals for the Second Circuit, but both sides withdrew their appeals after a change in SEC leadership, effectively ending the multi-year court battle.

Still, the latest dispute shows differences remain over how to interpret the XRP ruling. Whether the SEC argued at the time that XRP itself was a security, or only challenged Ripple's sales conduct, is likely to remain an important point in future debates over digital asset regulation.