What would happen if XRP is a security?

If XRP is declared a security, Ripple Labs would be ordered to pay a fine for selling unregistered securities . They would also have to give each XRP investor a share in the company. The price of XRP would most likely fall significantly right after due to panic sell-off but it would recover stronger afterwards.

On December 22, 2020 , the SEC filed a lawsuit against Ripple Labs Inc. and two of its executives, co-founder Christian Larsen and CEO Bradley Garlinghouse, claiming that they had sold over $1.3 billion through XRP cryptocurrency alleged to be an unregistered security.25 Oca 2022

XRP is a digital asset built for payments. It is the native digital asset on the XRP Ledger—an open-source, permissionless and decentralized blockchain technology that can settle transactions in 3-5 seconds .

The company is embroiled in a lawsuit, filed in 2020, in which the agency accused Ripple of raising $1.3 billion in unregistered digital-asset securities by issuing XRP tokens. The SEC’s key claim is that XRP is not a currency, but a security, and therefore subject to strict securities laws .