When Securities and Exchange Commission (SEC) Division of Corporation Finance Director William Hinman gave his opinion this summer that ether — the native asset of the Ethereum platform — was not a security under federal law, he listed among his justifications the fact that, although ether was originally distributed through a token sale, it has become substantially decentralized in the years since its network launch.
Since then, supporters of XRP, the third-largest cryptocurrency, have sought to demonstrate that the token — colloquially referred to as “ripple” due to its close association with the blockchain startup of the same name — is sufficiently decentralized to evade the security classification as well.
Ripple CEO Brad Garlinghouse responds to the criticism that #XRP isn't decentralized and is not a true cryptocurrency: "It is very clearly decentralized. I, as CEO of the company, can't control the XRP ledger."#SwellbyRipple #Ripple #xrpthestandard pic.twitter.com/HFanjmJjTV
— 𝗕𝗮𝗻𝗸 𝑿𝑹𝑷 (@BankXRP) October 2, 2018
Ripple CEO Brad Garlinghouse made this argument in a recent interview with financial news outlet Cheddar. Garlinghouse, who was speaking on the sidelines of the Ripple-sponsored industry conference “Swell” in San Francisco, said that he believes XRP is “very clearly decentralized.”