XRP Holders Are Not Investors in Ripple, Echoes Amazon Model

• Ripple CTO David Schwartz is always quick to defend the company, and recently, he took shots at a Twitter user who suggested that XRP holders are investors in Ripple.
• David dispelled the myth, and in drawing parallels to Amazon, noted that the e-commerce giant gets most of its running capital from purchases, but that doesn’t make them investors.

The debate on whether XRP investors qualify as investors in Ripple has raged on for years. It has even led to one of the biggest lawsuits in the crypto space, although the SEC has gradually lost its advantage in time. This debate came up on X recently, and this time, Ripple CTO David Schwartz jumped in to quash the suggestion that XRP holders invested in Ripple by comparing the payments company to Amazon.

The crypto social media circles are never dull, whether it’s BTC maxis feuding with Ethereum diehards or Solana owners distancing themselves from their slain hero SBF.

Most recently, it was the Ripple CTO, who refers to himself as Joel Katz, who clashed with an XRP enthusiast. It all started with an unrelated conversation on OpenAI and its administration. As CNF reported, the AI pioneers fired and then rehired CEO and founder Sam Altam in one of Silicon Valley’s most outrageous events.

Joel Katz believes that OpenAI’s biggest challenge was the composition and position of its board. He believes that having a board that’s not accountable to investors is “not such a great way to run a multibillion-dollar tech company.”

Ripple is Like Amazon–Users Aren’t Investors

It wasn’t long before XRP came up. One XRP enthusiast called Joel Katz out for his hypocrisy, arguing that Ripple operates under the exact same model.

“A board not accountable to investors sounds familiar, no? I would argue strongly that XRP holders are investors in Ripple, seeing as the majority of the cash that fuels biz operations comes from buyers of the token,” the critic stated.

A board not accountable to investors sounds familiar, no? I would argue strongly that XRP holders are investors in Ripple, seeing as the majority of the cash that fuels biz operations comes from buyers of the token.

— Blockchain Maverick (@web3_maverick) November 21, 2023

But Joel Katz was quick to respond, dismissing the argument by comparing Ripple and Amazon, the $1.52 trillion dollar e-commerce giant. He retorted:

Most of the cash that fuels Amazon’s biz operations comes from people who use their site to buy things from other people. Does that make them investors in Amazon?

The argument didn’t end there. Another user quipped that, unlike Ripple, Amazon didn’t create the goods that are sold on its website. However, according to the Ripple CTO, that doesn’t alter the basis of the argument.

“What difference would that make? If Amazon created 100% or 0% of the goods, the analogy would still work perfectly,” he responded.

The debate on the status of XRP owners and their rights at Ripple has been one of the fiercest in the sector. According to the SEC, XRP is a security as investors pooled their funds in a common enterprise with the expectation of a profit from the actions of the company.

However, this argument was dismissed by a federal judge earlier this year who ruled that XRP tokens sold on the secondary market aren’t securities. The case is ongoing, with many expecting the SEC to cave and seek a settlement.

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