Ripple CTO Confirms No Obligation to HODL XRP – What Does It Mean for Investors?

• Ripple CTO David Schwartz confirms that the company is not obligated to hold XRP and emphasizes that it operates in its own business interest.  
• Schwartz defends Ripple’s stance against the SEC, reiterating that XRP is not a security and the company owes no obligation to holders.

David Schwartz, Ripple’s Chief Technology Officer (CTO), recently confirmed that the company is not obligated to hold its ample reserves of XRP. This clarification came in response to ongoing debates regarding Ripple’s role in distributing and managing XRP and its responsibilities toward token holders.

XRP isn't a security because Ripple doesn't actually owe you "utility" or anything else. They are free to dump on you and you have no right to do anything about it other than join them in dumping XRP. That's why XRP is not a security.

— Pierre Rochard (@BitcoinPierre) March 4, 2025

Schwartz’s comments came after Bitcoin advocate and XRP critic Pierre Rochard expressed the view that Ripple does not need to protect the interests of XRP holders. Rochard argued that Ripple is free to sell its XRP holdings without any impact on retail investors.

This argument relies on the idea that XRP is not a security. Ripple’s CTO, in agreement with Rochard, pointed out that, much like any business, Ripple operates in its own best interests.

He likened the situation to owning artwork by an emerging artist. While investors may hope that the artist’s work increases in value, the artist has no inherent obligation to create more value for the investors. In the same way, Schwartz noted that Ripple should not be expected to act contrary to its business interests just to benefit holders of XRP.

Schwartz further explained that Ripple’s decision not to HODL its XRP reserves is aligned with normal business practices. The company has much more XRP than it could feasibly liquidate in the short term.

This reduces concerns that Ripple could suddenly sell its XRP holdings, possibly crashing the market. Schwartz stressed that Ripple, as a company with nearly 14 years of history , is not obligated to prioritize the financial outcomes of XRP holders.

He also touched on the misconception that Ripple’s role in the crypto industry might resemble a monopoly, where the company’s success would directly result in success for all XRP holders . Schwartz likened such thinking to the assumption that Google would be the only company to dominate the internet space.

This echoes Ripple’s broader stance. The company is involved in an ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), which claims that Ripple had an obligation to protect XRP holders’ financial interests.

XRP as a Non-Security

Schwartz’s recent statements reflect Ripple’s ongoing defense against the SEC’s accusations, which argue that Ripple’s XRP holdings should be considered securities. The SEC’s lawsuit, as reported by ETHNews, filed in December 2020, centers around whether Ripple acted as an unregistered securities issuer by offering XRP to investors. However, Schwartz reiterated that Ripple does not owe any obligations to XRP holders beyond normal business practices.

These developments also sparked discussions among XRP community members. “ScamDaddy,” a known Ripple critic, shared Schwartz’s statements, questioning why anyone would expect Ripple to act in the best interest of XRP holders.

I'd also add that Ripple has been here for about 14 years now. We have more XRP than we could possibly monetize in a short period of time, so there's no way to avoid us being here for quite a bit longer. Ripple being the only successful crypto company is as absurd as Google being…

— David "JoelKatz" Schwartz (@JoelKatz) March 4, 2025

He implied that Ripple’s business objectives should be clear to everyone. Schwartz responded, blaming the confusion on those who have pushed the narrative that XRP is a security, a stance that has clouded the true relationship between Ripple and XRP.